Where does Lenta invest?

Where does Lenta invest?

Sector: Trade

Investments for 2023: RUB 84.9 billion

Investments for 2022: RUB 10.8 billion

Lenta is one of the largest retailers in Russia, known for its hypermarkets and supermarkets. The company is actively investing in expanding its store network, developing its own logistics and introducing digital technologies. These steps are aimed at increasing competitiveness and improving customer experience.

Main assets of Lenta

Retail network

The company operates more than 250 hypermarkets and 450 supermarkets in more than 80 regions of Russia.

Store formats:

Lenta is actively developing hybrid formats, including compact supermarkets, hypermarkets and convenience stores. This allows it to reach a wide range of consumers with different needs.

Strategic presence:

The main concentration of stores is located in densely populated regions, including Moscow, St. Petersburg and large cities of Siberia.

Own logistics network

13 distribution centers, ensuring uninterrupted supply of goods.

Own vehicle fleet to optimize delivery and reduce costs.

Private labels (PL)

Products under the Lenta brands cover many categories: food, household goods, clothing. This allows the company to maintain competitive prices and increase margins.

Key investment areas

Expansion of the store network

In 2023, Lenta opened 50 new stores, including convenience stores and hypermarkets in regions with a high population density.

It is planned to increase its presence in small towns, where competition is lower and demand is steadily growing.

Modernization of existing facilities

Introduction of modern technologies in old hypermarkets:

Energy saving systems (LED lighting, energy-saving refrigerators).

Electronic price tags to speed up price changes and save paper.

Repair and update of interiors to improve customer comfort.

Development of online trade

Creation of an e-commerce platform, including an application and a website for ordering groceries with home delivery.

Investments in marketplaces and own online stores to compete with giants such as Wildberries and Ozon.

Improvement of logistics

Modernization of distribution centers and expansion of the vehicle fleet.

Use of artificial intelligence technologies for inventory management and optimization of delivery routes.

Development of private labels

Launch of new product lines under the Lenta brand to increase the share of private labels in total revenue.

Implementation of digital technologies

Creation of automated cash registers and self-service systems.

Use of Big Data to analyze customer preferences.

Implementation of loyalty programs, personalized discounts and recommendations

The Impact of Lenta on the Russian Economy: A Detailed Analysis

1. Job Creation

Lenta is one of the largest employers in Russian retail, providing stable employment for tens of thousands of people.

Number of employees:

The company's enterprises employ more than 45,000 people, including salespeople, logisticians, drivers, managers and administrative staff. This helps reduce unemployment in the regions where it operates.

Impact on small towns:

The development of the store network, including the opening of facilities in small and medium-sized towns, creates jobs not only in the retail sector, but also in related industries such as construction, transportation and warehouse logistics.

Support for employee qualifications:

Lenta regularly invests in the training and development of its employees. Advanced training and internal career growth programs allow employees to acquire new skills and advance in their careers, which has a positive effect on the overall employment level in the country. 2. Support for domestic producers

Lenta actively cooperates with Russian suppliers, which makes it an important link in the development of the local agro-industrial complex.

Local suppliers:

More than 80% of the goods presented on the shelves of Lenta stores are produced in Russia. This includes food, household chemicals and non-food products. The company works with more than 1,000 domestic suppliers, which stimulates production at the regional level.

Stimulating the local economy:

Cooperation with local farmers and processing plants allows us to increase production volumes, improve product quality and reduce transportation costs, which makes goods more accessible to consumers.

Support for small and medium-sized businesses:

The company creates platforms for small producers to enter the market, offering them preferential terms for placing goods on their shelves. This helps small businesses find new markets and develop.

3. Investments in the regions

The development of the Lenta chain has a positive impact on the infrastructure of the regions, especially in small towns and rural areas.

Construction and modernization of facilities:

Each new store opening is accompanied by construction and landscaping of the territories, which improves the overall infrastructure. Comprehensive development includes the creation of parking lots, modernization of transport hubs and the development of adjacent territories.

Increasing the availability of goods:

Opening Lenta stores in small towns provides access to a wide range of quality goods at competitive prices. This is especially important in regions where the level of competition is low and the range of goods is limited.

Support for the local economy:

Stores purchase products from local producers, contributing to economic growth in a particular region.

4. Increase in tax revenues

Lenta plays a significant role in the formation of regional budgets through the payment of taxes and fees.

Tax deductions:

Annual tax revenues from the company's activities amount to billions of rubles. These funds are used to implement social and infrastructure projects in the regions.

Financing social programs:

Part of the tax revenues is used to improve the quality of life in the regions: construction of schools, hospitals, roads and other public facilities.

Creation of new taxpayers:

By employing new employees, the company increases the number of taxpayers, which further stimulates budget revenues.

Impact on investors: analysis of prospects and risks

1. Exchange status

Lenta is a public company, whose shares are available for trading on international and Russian stock exchanges.

Ticker and exchanges:

The company's shares are listed on the London Stock Exchange (LSE) and the Moscow Exchange (MOEX) under the ticker LENTA. This makes it accessible to both private and institutional investors.

Investment attractiveness:

Presence on international exchanges ensures the company's transparency, regular publication of financial statements and compliance with high standards of corporate governance. These factors increase investor confidence and contribute to increased liquidity of shares.

2. Financial policy

The company follows a strategy aimed at ensuring stable income for its shareholders.

Dividend policy:

Lenta maintains stable dividend payments, which makes its shares attractive to investors looking for regular income. In 2023, the dividend yield was 6%, which is in line with the average in the retail sector. The company strives to return a significant portion of profits to shareholders, which ensures their long-term interest.

Financial stability:

Stable cash flows and effective cost management allow the company to maintain a competitive position even in conditions of market volatility.

3. Growth potential

The company is actively developing new business areas and strengthening its position in the Russian market, which creates opportunities for long-term growth.

Investments in digitalization and online trading:

Lenta is actively investing in the development of its online platform and delivery infrastructure. This allows it to meet the growing demand for e-commerce and compete with market leaders. In 2023, online sales grew by 35%, which demonstrates high potential for further revenue growth.

Expansion of the store network:

The company continues to open new stores, especially in regions with low competition. This not only increases Lenta’s presence in the market, but also helps it attract new customers, ensuring steady revenue growth.

Strengthening its position in the regions:

Focusing on small and medium-sized cities helps the company capture new markets where competition is less intense and the consumer base remains underutilized.

4. Risks for investors

Despite the significant prospects, investors should consider a number of factors that could affect the company’s results.

High competition in retail:

The retail market in Russia remains extremely competitive, with major players such as Magnit and X5 Group actively fighting for market share. This puts pressure on the company’s margins and requires significant marketing efforts.

Exchange rate volatility:

Some product categories offered by Lenta stores are dependent on imports. A weaker ruble could increase the company’s costs, which could negatively affect its profitability.

Slowdown in purchasing power growth:

Economic instability and a decline in household incomes may affect consumer demand, especially in regions where purchasing power is traditionally lower.

5. Lenta stock futures

For traders interested in more active trading, the company's stock futures instrument is available.

Instrument features:

Lenta stock futures allow speculators to earn on both the rise and fall of stock prices using leverage.

Hedging applications:

This instrument can be used to protect a portfolio from fluctuations in the company's stock price, which is especially important in conditions of market instability.

Lenta occupies a unique place in the Russian retail market due to its strategic approach to development and investment. The company is not only expanding its store network, but is also actively introducing digital technologies, improving the quality of service and availability of goods for consumers. Particular attention is paid to supporting domestic producers, which has a positive impact on the Russian agro-industrial complex.

The introduction of an online platform and the development of logistics infrastructure make Lenta a competitive player not only in the traditional retail segment, but also in e-commerce, which continues to gain popularity. These efforts by the company not only contribute to its growth, but also have a significant impact on the Russian economy, creating jobs and stimulating regional development.

For investors, Lenta is an interesting investment target. A stable dividend policy and significant growth potential make its shares attractive for both long-term and short-term investments. In a highly competitive environment, the company demonstrates sustainability and strategic flexibility, which is confirmed by its focus on new areas, such as online trading.

Thus, Lenta is an example of a company that successfully adapts to modern market realities, using innovation and an emphasis on local production to strengthen its position in the market.