X5 Retail Group lowers sales forecast for 2009

Russia-based X5 Retail Group is lowering its forecast on sales revenue growth in roubles for this year to 24-25%. "A high rate of unemployment and decreasing buyer capacity of the population has had a negative influence of the size of average purchases. We so far see no signs of the situation changing for the better and we expect that the population will continue economizing in the fourth quarter of 2009. In this regard, we have decided to adjust our annual forecast on sales revenue growth to a more conservative figure," said X5 CEO Lev Khasis.

The company's capital expenditure forecast remains unchanged with the company planning to invest up to RUB14 billion (USD454 million) in development. Around 69% of capex will be earmarked to cover the opening of new stores, 13% for logistics development and the remaining 18% will be used to repair and modernise the company’s existing infrastructure and IT development. The RUB14 billion (USD454 million) investment will mean that X5 will exceed its annual plan for opening new stores and distribution centres.