A foreign invasion of the£34.1 billion Russian food retail market is expected over the next few years, but domestic players are preparing to fight back.
Auchan, Spar and Metro are the only foreign food players to have made significant incursions into Russia so far, according to M+M Planet Retail's report Grocery Retailing in Russia 2002. However, Wal-Mart, Casino and Carrefour are all thought to be circling.
French group Auchan opened its first hypermarket in Russia in August and plans 10 stores in the longer term.
Spar has opened four shops since last year and intends to have 30 Eurospar supermarkets by 2005. The retailer also plans Interspar hypermarkets and neighbourhood stores.
Germany's Metro will open a third cash-and-carry store by the end of the year. In the next five years, Metro wants to have 20 Real hypermarkets and six cash-and-carry stores.
M+M Planet Retail analyst Bryan Roberts said Russian retailers are expanding as consumer spending in Moscow increases.
He said: 'Domestic retailers are effectively and rapidly consolidating. The Russian market is similar to China. There is long-term potential, but it's a question of how much money the foreign entrants are willing to lose short term.'
Russian food retailers, such as Paterson, Perekryostok, Pyatyorochka and Sedmoi Kontinent all have aggressive expansion plans in place.