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. Last Updated: 07/27/2016

Ramstore Opens 2 Supermarkets




Ramenka on Wednesday threw open the doors of its first two free-standing Ramstore supermarkets, the latest step in the Turkish chain's aggressive expansion plans for Moscow.


Unlike Ramenka's highly popular established pair of hypermarkets, the new stores on Krasnobogatyrskaya Ulitsa and Ulitsa Krasnogo Mayaka do not anchor large shopping centers.


But the company is betting the smaller stores will continue to be a magnet for shoppers seeking Western-style service at a reasonable price, officials said.


Ramstore expects 3,000 to 4,000 customers a day will stop at each of the new stores on weekdays and that number could double on weekends, Ramenka general director Aziz Bulgu said at a news conference held in a central aisle of the jam-packed Krasnobogatyrskaya store Wednesday.


Speaking above the din of the thronging shoppers, Bulgu declared that the four Ramstores - all of which are located in the city outskirts - are just the beginning. Next year, the company plans to open four more supermarkets and another giant shopping center.


Asked how business is going at the established Ramstores, Bulgu said simply: "Very well."


Ramenka sank $2.5 million into renovating the 1,000-square-meter store on 23 Krasnobogatyrskaya, which is some distance north of the Preobrazhenskaya Ploshchad metro station, and $2 million on a store exactly the same size at 9 Krasnaya Mayaka, situated just over a block away from Prazhskaya metro station.


Ramenka, owned by Turkish real-estate giant Enka, supermarket chain Migros and food trading company Ram Foreign Trade, has been pressing for rapid expansion since it opened the first Ramstore in November 1997.


Unperturbed by the financial debacle of August 1998, Bulgu even says the crisis could be boosting sales since the chain offers goods at bargain prices.


To get that point across, Ramenka has run an aggressive advertising campaign saying that its prices are lower than even those in outdoor markets, where Muscovites usually head for wholesale-level prices.


A look Wednesday at price tags in the new Krasnobogatyrskaya store showed that a number of goods were competitive compared to the outdoor markets. A kilogram of bananas, for example, was marked at 12.90 rubles (49 cents), which came in under prices at a random sample of outdoor markets - where the fruit was going for 14 rubles a kilo - and downtown shops, where 16 rubles was the more common price.


However, Russian reporters and shoppers alike challenged Bulgu on Ramstore's "cheaper than outdoor markets" pledge Wednesday, saying they had found the same goods marked lower even in their neighborhood shops.


Bulgu promised to look into the complaints, adding that prices at the Krasnobogatyrskaya outlet would not be changed until after the new year.


Analysts said Ramstore was not always cheaper than outdoor markets, but that it was targeting middle class Russians who want quality goods at low prices.


"They aren't aiming for the person who is dropping in for a loaf of bread or a bottle of orange juice," said Amanda Spring, a managing partner who tracks the retail sector with DTZ Moscow. "They are aiming for people with weekly shopping lists."


That strategy has strong appeal to what remains of Moscow's middle class after the crisis and is making Ramstore into a clear success, analysts said.


"There has been a switch from more expensive stores to cheaper stores - of which Ramstore is one - since the devaluation," said Alexander Andreyev, consumer goods analyst at Brunswick Warburg. "There aren't many outlets like Ramstore in Moscow or nearby. You can count them all with two hands."


The fact that the shops are all located in the city outskirts appears to be of no consequence. "In a way, it is much more convenient to go to a shopping center that is not [downtown]," Spring said, pointing to conveniences such as parking space. Shopping centers in the West, which also tend to be in the suburbs, are built with that in mind, she said.