The M.Video-Eldorado group controlled by Said Gutseriev unites networks under the new Eldorado + M.Video brand in order to increase their economic efficiency. Market participants consider the decision logical in the current conditions and are confident that the group will close part of the stores, at least where brands are present in one shopping center. Other large electronics retailers also began to reduce networks: DNS closed about 150 stores, and Citilink shifted its development vector to online sales. The trend towards optimizing retail, experts are sure, will continue next year due to a decrease in demand. and Eldorado. Now the stores will be called “Eldorado + M.Video”, such points have already been launched in Togliatti and Ryazan.
“Combining brands in a number of areas, including IT, logistics and marketing, has already contributed to economic efficiency and investment optimization,” explained Sergey Li, COO of M.Video-Eldorado Group.
The merger of brands will attract new customers, and attendance will increase by 10–15%, the retailer hopes: “According to the results of the pilot period, we will decide on scaling up the new format.” In total, the group has 601 M.Video stores and 647 Eldorado stores in 369 cities.
M.Video bought out Eldorado in March 2018 for 45.5 billion rubles. (see Kommersant dated March 22, 2018). “Pulling two brands initially looked like a strange decision,” says one of the top managers of a large retailer. According to him, the group should immediately unite the networks. Previously, the two chains were responsible for different segments, Mikhail Burmistrov, CEO of Infoline-Analytics, explains: “Eldorado focused more on budget technology, and M.Video focused on the high price segment. But since many brands have left the Russian Federation, the difference between the segments has smoothed out.” The expert believes that the group may close part of the stores where two brands are present in one shopping center. But M.Video-Eldorado claims that the merger “will not affect the number of stores.”
Thus, DNS closed about 150 outlets in different cities, and Citylink shifted its development vector to online. The retailer did not specify whether stores would be closed. Online is gradually increasing its share in the overall sales structure, MTS confirms, specifying that about 80% of the chain’s buyers prefer to pick up goods from the outlet. MegaFon calls retail the main sales channel: “This year we launched a project to merge store chains with Yota, which also includes the opening of new joint outlets. At the same time, we continue to increase online sales.”
Demand in the consumer electronics market will decrease by about a third this year, which in the short term “will lead to a transformation in retail,” says Aleksey, Managing Partner at F+Tech Group Melnikov: “We will see parity between online and offline sales. Large retailers will continue to reorient stores to the showroom format and increase their own e-commerce.” Mikhail Burmistrov agrees with this: “The trend of closing offline outlets will continue, or stores will begin to switch to a hybrid format, where there is both an offline store and dark stores for online orders.”