Moscow, Russia (October 17, 2023): Magnit, one of Russia’s leading retailers, opened the first distribution center for its hard discounter chain, V1 (Pervy Vybor [First Choice]).

The new distribution center of 19.2 thousand square meters is located in the Dmitrovsky district of Moscow Region. The DC can maintain a number of different temperature conditions for the products and includes several storage zones: an ambient warehouse for dry foods, a secure storage area for alcohol, a fruit and vegetable space, as well as a zone for fresh and ultra-fresh categories of products. The distinctive feature of distribution centers serving the hard discounter format is the increased rotation of inventory, so this warehouse has more space for floor storage as well as for cross-docking and pick-by-line operations, which ensure high speed of processing for incoming and outgoing flows and help optimize storage space utilization.

The warehouse complex is expected to serve up to 200 locations in Moscow, Moscow Region, and neighboring cities. Goods will be delivered to stores by Magnit’s own vehicles, with an average delivery distance of up to 150 km, which will allow optimizing transportation costs and ensure high delivery speed and freshness on the shelf.

Over 350 suppliers will deliver their goods directly to this distribution center, while a part of the assortment (for example, some foreign fruits) will be shipped to the hard discounters’ DC from Magnit’s other warehouses, which will help offer more attractive prices for such products thanks to larger purchasing volumes and direct imports.

V1’s first distribution center operates under a 3PL model: all warehouse operations are run by its partner. Such cooperation model offers a number of advantages: ready-to-use infrastructure and technologies, experienced provider with established competencies, and the possibility to quickly launch operations. In the future, V1 plans to open its own distribution centers as well in order to test various logistics solutions and options.

Anzhela Ryabova, Magnit’s Director of Hard Discounter Format:

The launch of our own distribution center will allow us to start expanding the V1 store network. It is important to mention that this logistics complex accounts for the special features of our format. For instance, in contrast to a traditional retail warehouse, our distribution center has much more zones for storing and processing the goods on the floor, which allows sorting products immediately after their arrival and promptly assembling batches to be shipped to the stores. A properly built logistics infrastructure is a necessary requirement for rolling out an effective discounter model and one of the tools used to reduce prime costs. We need it to offer high-quality and fresh products at affordable prices to our customers. The 3PL model chosen for the first distribution center is the optimal solution at an early stage of development, however, further on, we plan to open our own warehouses as well.

Magnit launched the hard discounter format in February 2023. As of today, V1 has 21 stores located in Moscow and Moscow Region. By the end of the year, the Company plans to expand the network to several dozens of stores. The key feature of the format is the combination of low prices and high quality of goods, achieved via significant optimization of in-store and logistics operational processes.

V1 hard discounter launches first distribution center