RUSSIAN FOOD RETAIL: Eat… Like Nothing Else Matters

With this report we initiate coverage of four Russian food retailers: Magnit and Lenta with BUY ratings, and X5 Retail Group and Dixy Group with HOLDs. These companies account for 15% of Russia’s highly fragmented food retail market. We take a cautious view on the sector as a whole in light of shrivelling consumer spending. Nonetheless we believe that these four largest federal chains are better suited than other smaller chains and stand-alone retailers to withstand the crisis.

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