OREANDA-NEWS. July 11, 2012. X5 Retail Group N.V. ( “X5” or the “Company”), Russia's largest retailer in terms of revenue (LSE ticker symbol: FIVE), announced today that the Company has opened its first Perekrestok supermarket in Astrakhan, a major city with a population of 520 thousand people  in the southern part of European Russia on the coast of the Caspian Sea.

The new Perekrestok supermarket has 795 square meters of selling space and employs 80 local residents from the Astrakhan region. The supermarket is operated under a reverse franchising agreement whereby X5 provides its franchisee with inventory, market research and advertising, at the federal level, while the franchisee is obliged to comply with the standards set by X5 in return for a commission fee from the Company. Reverse franchising is an attractive business model that provides entrepreneurs with the opportunity to develop a business in partnership with the leading Russian retail company.

The Perekrestok store in Astrakhan offers approximately 12,000 stock keeping units, 90% of which are food, including goods supplied by local producers. X5 pays special attention to the Company's assortment matrix in the regions where it operates and makes adjustments on an ongoing basis, in order to reflect changes in consumer preferences. As a result, the share of locally produced products in the assortment matrix is expected to increase in the mid-term.

X5 Franchise Department Director, Igor Sinko commented:

"Due to its size and demographics, Astrakhan is a very attractive region for retailers. This store was opened by a local entrepreneur who wanted to start his own business and turned to us for help. I'm sure that the local shoppers will appreciate the new best-in-class supermarket and this project will be another successful example of the reverse franchising business model".