Yolki-Palki to Create Supermarket Chain

VedomostiYolki-Palki founder Arkady Novikov plans to open supermarkets with the same name.
The owners of the Yolki-Palki restaurant chain plan to create an eponymous supermarket chain.

Rodnik NT, a company recently founded by famed restaurateur Arkady Novikov, announced last week that it plans to open as many as six grocery stores in Moscow in 2005.

Novikov launched the Yolki-Palki restaurant chain in 1996 and currently owns 45 percent of Lunch, the company that operates the chain's 31 restaurants in Moscow, St. Petersburg, Nizhny Novgorod and Rostov-on-Don.

Rodnik NT will open its first, $2 million, 600-square-meter supermarket on Izmailovskoye Shosse in late January, said company spokeswoman Yelena Sokolova.

As many as five more supermarkets will follow by the end of next year, according to Mikhail Orazov, deputy director of Lunch. "Plans are only set for next year, and what happens next will depend on the chain's performance," he said.

Yolki-Palki supermarkets will be in the neighborhood, mid-price format that the owners describe as "soft discount." Orazov said he expected an average receipt to be in the vicinity of 100 rubles to 200 rubles ($3.50 - $7).

The supermarkets will offer up to 10,000 items, including traditional salads and semi-prepared products used by Yolki-Palki restaurants. "Every store will have a restaurant, up to 100 square meters in size, where any product just bought by a customer could be cooked for him," Orazov said.

Valery Kuznetsov of the Russian Marketing Association said he doubted that Yolki-Palki could become as strong a player on the retail market as it is among restaurant chains.

"Today it only makes sense to launch a retail project with aggressive, simultaneous acquisition of a large number of shops," he said. "It is believed that after Russia joins the WTO, only those chains that have at least 50 stores and a turnover of at least $500 million can stay independent."

Market experts also warned that it will be difficult to find an inexpensive supplier of 10,000 items for just one store.

"Of course, they could go to the Perekryostok distribution center, but prices there are not cheap," said Yury Yakovchik, general director of Paterson, a supermarket chain. He added that the new chain's rent and personnel costs would be too high.

But Maria Tinika, general director of Stanley Estate, said that taking into account the fact that Moscow's retail market is far from saturated, the new chain's gradual development plan could be a success.

"Moscow still has space [suitable for supermarket development] that is being used inefficiently. A man with a team and ideas, such as Novikov, will find room for development," she added.