Retail Giant Opens First Hypermarket

German retail giant Metro is set to open the doors of its first Real hypermarket in Russia on Thursday.

The retail conglomerate is scrambling to catch up with other foreign and domestic rivals that are setting up new hypermarkets, vast stores that sell everything from food and household goods to clothing and furniture.

Metro first announced plans to bring the Real chain to Russia in 2002 but got tangled up in red tape, Real's country manager, Thorsten Vogt, said at a news conference on Wednesday.

The 25 million euro ($30 million) hypermarket took only ten months to build, he said, but getting all the necessary permits for the location in Moscow's southern Brateyevo district appeared to take "a lifetime."

Despite the slow start, Metro plans to open another hypermarket in Moscow and one in Tolyatti by the end of the year. Real also plans to open stores in St. Petersburg and Kazan in 2006, at a price tag of at least 20 million euros each, Vogt said.

Russians are becoming more discerning shoppers, which explains the recent boom in hypermarkets, said Anna Zaitseva, spokeswoman for the domestic Sedmoi Kontinent retail chain.

Consumers want to move away from shopping at outdoor markets but not everyone can afford pricier supermarkets, she said.

Vogt compared a hypermarket to an upgraded rynok, or open-air market, because it offers thousands of affordable products under one roof.

Last month, Sedmoi Kontinent opened its first Nash-brand hypermarket in Moscow.

Mosmart, a Russian hypermarket chain, recently announced its plans to expand from three to 15 locations by 2008.

France-based Auchan, which became the first hypermarket chain to open in Russia three years ago, currently has six locations in Moscow and the surrounding region.

On Tuesday, Moscow Mayor Yury Luzhkov announced that Auchan would construct a hypermarket on Leninsky Prospekt -- it would be the first central Moscow location for the retailer, whose other stores are spread along the Moscow Ring Road, or MKAD.

Both central and MKAD locations are very competitive, said Nina Novikova, head of retail research at Noble Gibbons.

The strength of Real's new locations is that they will be easily accessible by foot, she said, while the advantage of hypermarkets on the MKAD is their convenience for drivers.

Total sales at Real's 316 hypermarkets in Germany, Poland and Turkey reached 8.2 billion euros ($9.9 billion) last year.