870 russian suppliers became new partners of Magnit in 2021

Krasnodar, Russia (February 08, 2022): The Company increased the number of Russian suppliers it works with by 19% compared to 2020, with the total number of partners at almost 5,500 and the share of Russian products in its assortment reaching 94%. A significant contribution to the sales uplift came from medium- and small-sized local producers in such categories as fish, meat, dairy, culinary products, cheese, beverages, and others. The total turnover of domestic suppliers with Magnit increased by 16% in 2021.

Magnit constantly expands the geography of sales of Russian producers: about 250 partners of the Company began to offer their products outside their native region in 2021 and were able to significantly increase their own sales.

A noticeable part of Magnit's pool of suppliers are small local producers, mainly represented by farms that independently produce farm products (vegetables, fruits, dairy products, meat gastronomy, etc.). As of the end of 2021, there were about 2,500 such partners.

The Company implements a set of targeted projects to increase the number of products of domestic suppliers on its shelves. Magnit enters into direct long-term contracts with domestic agricultural producers for supply of fruits and vegetables. As part of such contracts, 305 thousand tons of products were supplied to Magnit in 2021, and the number of signed agricultural contracts increased by 35%. In order to develop relations with small farms, last year, Magnit began to use a simplified form of contract, reduced its requirements for the level of fulfillment of contractual obligations, and set shorter payment terms for delivered goods compared to large partners. As of today, 40 such contracts have already been entered into with farmers from Moscow, Krasnodar, and Stavropol regions, and others. The Company doubled the number of Farmers’ Counters — small, dedicated departments with local products in and outside the sales area — mainly in its convenience stores. There are about 300 of them in different regions of the country. Magnit is also developing Farmers' Markets on the sales floor of large format stores and has doubled their number to 185 since the beginning of last year. The Company also highlights local products on its shelves with special stoppers.

In 2021, the Company launched a joint project in cooperation with Rosselkhozbank to promote farmed products in Magnit stores. Any producer today can send its commercial proposal for supply of goods to the Company via the bank’s platform, with such proposal passing directly to Magnit’s Procurement Department. The Company continues its cooperation with the SME Corporation, as part of which it opened the first Farmers’ Island in Russia last year in a Magnit store in Ufa. The Company also plans to launch the pilot project in its other stores.

Magnit is also a partner of the “Tastes of Russia” national competition of regional food brands held by the Ministry of Agriculture of Russia. The competition helps the Company study consumer preferences in different geographies and expand its product range with local brands.

In addition to that, Magnit continues to conduct trading and purchasing sessions for producers of different territories. About 50 such events took place in 2021.

Jan Dunning, President, CEO of Magnit Retail Chain:

“Local suppliers are our key advantage because it is their products that, in many respects, drive customer loyalty towards Magnit. We build long-term and mutually beneficial relationships with producers, annually “opening our shelves” for hundreds of new partners and expanding the local assortment, we conduct joint business planning and market analysis to make our cooperation as effective as possible and to enable consumers in any region to purchase quality local products they love.”