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. Last Updated: 07/27/2016

Sedmoi Kontinent Explores New Format

Grocery chain Sedmoi Kontinent plans to branch out into convenience stores to cement its leading market position in Moscow, CEO Galina Ilyashenko said Friday.

Earlier this week, the Citimarket convenience store chain, which runs Svetofor shops, said it had sold 50 percent plus one share for $10 million to Sedmoi Kontinent.

Ilyashenko said Sedmoi Kontinent, which runs 123 stores, mostly upscale supermarkets, was still on the lookout for acquisitions.

Sedmoi Kontinent plans to invest $150 million within three years to open more convenience stores under the Svetofor name. That would put it into direct competition with other discounters like Pyatyorochka, part of Russia's leading food retailer X5, and Kopeika.

"We are entering a new format, the only format in which we are not operating," Ilyashenko told a news conference. "A convenience store allows us to be closer to the client, allows us to operate more trading space."

One of the biggest restraints on retail development in Moscow is expensive property. An average convenience store has trading space of 200 to 400 square meters, compared with 18,000 square meters for supermarkets and 40,000 for hypermarkets.