A firm headed by a Russian retailer, with $500 million from a private Dutch investment fund, is seeking to build a chain of small food stores in South Florida, according to Supermarket News. AgroTrade International has started scouting for retails sites and hiring workers for a chain that it said could have 400 stores and $1 billion in revenue within four years.
The Dutch fund previously invested in Russia’s X5 Retail Group that launched two store formats, creating some of the first modern grocery stores in Russia. The stores had good locations, low pricing, and a wide range of products in underdeveloped markets, making them successful from 2000-2010.
AgroTrade is currently looking to lease sites of between 4,200 square feet and 7,500 square feet in the Miami area. However, replicating its Russian success in a mature U.S. market could pose a bigger challenge, said Mylos Ryba, a London-based senior retail analyst for Planet Retail. “There is a massive difference between operating a grocery chain in Russia and in the USA,” Ryba said. “Russian grocery retail is more about store expansion rather than store efficiency, consumer needs and sophisticated retailing,” he said. The company would have to have a very different business strategy for the USA, he added.
Doron Valero, managing partner for Miami-based developer Global Fund Investments, said he felt the Miami market could absorb a small grocery format, particularly in urban markets. “There is room here for small urban stores, no doubt,” Valero siad. “I don’t think there’s room for another supermarket chain like Publix.” Valero indicated also that he thought it unlikely that the company could open 60 stores this year, as indicated in some published reports from Russia last week.
