28 march 2011
Right On Time: X5 Retail Group has completed the replication of SAP for Retail with assistance from GMCS
X5 Retail Group N.V., a major retail company in Russia in terms of sales volumes, has completed the replication of the management information system based on SAP for Retail offered by the SAP company – one of the leading global suppliers of software solutions for business management, on a whole retail network scale. 

GMCS acted in the capacity of the general contractor. The system which was launched precisely within the specified time provides management under the unified single business processes of X5 Retail Group – pricing, efficient management of assortment, product distribution, finances and orders for goods. The number of system users today is over 2,500 people and is expected to grow on account of new shops opening.

The project of implementation of the new information system was launched in March 2008 with a view to sustain the growing scope of the X5 Retail Group business, standardise management processes and improve the transparency of the multi-format network working with the Perekrestok, Pyaterochka and Karusel brands. X5 Retail Group chose the SAP for Retail system as a platform for the implementation of the designated goals. In keeping with the developed implementation strategy, in 18 months the system was launched in the pilot region – the Volgo-Vyatka branch.

In November 2009 the project team of X5 Retail Group completed, in collaboration with its partner GMCS, the transition of the retail network branches to the single system of data maintenance related to merchandise, partner, assortment, supplier specifications. In April 2010 the major legal entity operating in retail trade – Perekrestok TD has transferred its operations into SAP for Retail. From June to September 2010 all the retail network branches have started to fully operate within the new system, including financial and commodity transactions.

In the framework of replication new tasks arising as a result of changes in the customer business needs have been accomplished. With the growing share of X5 Retail Group in the Express Retail, in compliance with the retail network's single strategy at SAP for Retail, management of a network of corner-shops was exercised. To support the operation of several legal entities within one system, its functionality has been expanded as regards automated stock replenishment, as well as financial management with the purpose of optimising the reporting period closing deadline.

Due to the disconnection of the information systems previously used by the branch offices, a necessity arose to ensure the generation of necessary analytical reports by a unified system. The SAP BW -based data store developed on the basis of the pilot project has now included the compilation of summary operational and corporate reports, including specialised reports for the business units. Today the top management and the heads of the retail network branch offices promptly receive all necessary management reporting on sales, the merchandise flow, stocks in different analyses. A tool for preliminary estimation and distribution to recipients of selected reports in stock forms has been set.

"All branch offices of the X5 Retail Group currently operate under the SAP for Retail management, as do the storage facilities located across the Russian territories. The results received to date have once again confirmed the correct choice of a system implementation strategy used in the framework of the replication, as well as the professionalism and efficiency of the project team work. We have constructed a unique platform which will be able to support our company's growth and business development," said Teymur Shternlib, deputy head executive business support director at X5 Retail Group. "The plans of X5 Retail Group for the current year include automation of processes related to pricing, which will, among other benefits, enable us to analyse changes in retail prices, the volume of sales and optimise prices considering demand elasticity, as well as to forecast sales and replenish our stock. I feel sure that all of this will help us satisfy the needs of millions of our customers every day."

"I am certain that the implementation of SAP solutions by the major Russian foodstuffs retailer X5 Retail Group will facilitate the company’s further active growth and expansion not only in the Russian market, but equally beyond it, as well as enable it to continue offering its customers services and products," said Vladislav Martynov, Director General of SAP CIS.

"X5 Retail Group are a team of true professionals in their own field working with whom is both interesting and enriching. Constant exchange of experience in the course of the project, search for optimal ways of tackling designated tasks, openness for innovations and accurate result orientation have helped to develop groundwork which is unique for the Russian retail experience and have found their application in the course of the automation implementation," said Mikhail Romanov, GMCS President. "We are glad that our cooperation with X5 Retail Group continues in the framework of the current plans in system development".

In 2010 the project won the SAP award "For the best-quality project in SAP for Retail implementation in the CIS" becoming a winner of the SAP Quality Award 2010 award.

About X5 Retail Group

Headquartered in Moscow, X5 Retail Group is Russia's largest retailer in terms of revenue. The Company operates several retail formats: the soft discounter chain under the Pyaterochka brand, the supermarket chain under the Perekrestok brand, the hypermarket chain under the Karusel brand, the online retail channel under E5.ru brand and convenience stores under various brands.

As at 31 March 2012, X5 had 3,139 Company-operated stores. It has the leading market position in both Moscow and St. Petersburg and a significant presence in the European part of Russia. Its store base includes 2,643 soft discounter stores, 337 supermarkets, 77 hypermarkets and 82 convenience stores. The Company operates 29 DCs and 1,392 Company-owned trucks across the Russian Federation.

X5 is run on an SAP platform.

As at 31 March 2012, X5’s franchisees operated 434 stores across Russia. For the full year 2011, net sales totaled USD 15,455 mln, EBITDA reached USD 1,130 mln, and net profit amounted to USD 302 mln.

X5 Shareholder structure as of 31 March 2012: Alfa Group – 47.86%, founders of Pyaterochka – 19.85%, X5 directors – 0.12%, treasury shares – 0.11%, free float – 32.06%.
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