11:35 28.11.2014

Retail Group plans to open 200-300 VK Express stores under franchise agreement in five years

2 min read

Kyiv, November 28 (Interfax-Ukraine) – Public joint-stock company Retail Group (Kyiv), a managing company of food retail chains as a part of the eponymous holding, plans to develop the VK Express store chain via franchise agreements.

A manager of the Franchise project Oleksandr Lukianov said at a press conference at Interfax-Ukraine that the VK Express format (convenience store) was selected for the franchise model as the most promising from the point of view of demand on the market and crisis-resistance.

"Today Ukraine is on the stage of the market development and the development of the convenience store format. Market saturation is only 30% of its potential today. Market trends show that this format has been successfully developed for the past four or five years and the same trend will be seen in next five or seven years," Lukianov said.

He said that cooperation under franchise agreements for VK Express implies that a partner has a retail space from 100 to 400 square meters in Kyiv and in the range of 150 kilometers around the city, all goods are sent on consignment without investment in their purchase, and the commission fee is progressive, starting from 16% of revenue. The range of goods will be 1,500-3,500 items depending on the space of the store.

"We'll believe that the project is success if in five years we open 200-300 stores," Head of the Retail Group Supervisory Board Roman Lunin said at the conference.

Franchise agreements have not yet been signed. Lunin said that in the first year it is not expected that large activity under the project will be seen.

Lunin added that on average the monthly turnover of one VK Express store amounts to UAH 1.5 million and this allows predicting an additional turnover of at least UAH 300 million a month if the Franchise project is realized.

Retail Group was established in 2005. As of October 30, 2014, the group managed 41 Velyka Kishenya stores in 16 cities in Ukraine, 15 Velmart discount stores in 13 cities of Ukraine, four VK Select premium class stores, a Prosto-Market discount store, nine VK Express convenience stores in Ukraine and Green Hills Market stores and one Velmart store in Moldova.

AD
AD
AD
AD