Retailers Prefer Own Stores to Acquisitions

Russian retailers prefer to expand by opening their own stores, rather than acquiring competitors, because the scarcity of potential targets has made takeovers too expensive, PricewaterhouseCoopers said Friday.

Companies that opt to expand without purchases made up 56 percent of respondents polled by the accounting firm. The study was based on 23 online interviews with Russian retail companies, New York-based PwC said in an e-mailed statement.

X5 Retail Group, the country's largest supermarket company, and main competitor Magnit are among retailers that are adding stores to gain market share. The country's 10 main retailers control about 5 percent of the market, compared with 85 percent for the four British leaders, the survey shows.

"The growing purchasing power of Russian consumers" will keep fueling retail-industry expansion in the country, according to PwC.

The country's $434 billion retail market will expand by 22 percent per year through 2010 as household incomes increase about 15 percent, UBS analysts have estimated. The country's economy is swelling for a 10th straight year as surging energy prices boost revenue from exports of crude oil and natural gas.

Bureaucracy, rising competition and a lack of infrastructure are the main barriers to expansion, according to the survey. Companies also are hampered by shortages of workers and space for stores and warehouses, it shows.