“The cashier job will be a thing of the past”: the first deputy general director of the X5 Group on staff shortages and work automation

On staff shortages as a “trigger for market transformation”

The X5 Group currently employs 392 thousand employees, Salakhutdinov said, calling the staff shortage a “serious challenge” for the company. The staff shortage is “a trigger for market transformation,” said the manager, adding that retailers that are able to quickly implement innovative solutions that allow business to grow without a proportional increase in the number of employees will be able to maintain profitability and continue growth.

According to Salakhutdinov, the number of employees of the retailer is growing as its store network expands: in 2023, the X5 Group opened more than 3 thousand points. At the same time, the company is doing “quite a bit of optimization,” so the growth is “not that significant.”

If we take the market as a whole, in trade and logistics, says the first deputy general director of the X5 Group, approximately 500 thousand employees are currently missing. In turn, currently all critical elements of the X5 Group infrastructure are completed, Salakhutdinov said.

About the rejection of cashiers

The manager believes that “30% of the activities that a person performs today” can be automated and at the same time increase the speed and quality of work.

For example, with the help of automation it was possible to introduce self-service cash registers, Salakhutdinov said, emphasizing that such cash registers absorb about half of the traffic in the entire network, and in some stores – 85%. The first deputy general director of the X5 Group did not rule out that “soon the job of a cashier constantly sitting in front of a terminal will be a thing of the past.”

“In addition, we believe that the model of the future is when an employee works not when the company needs it, but when it suits them,” says the manager. In his words, the company has created its own job board: it allows store, logistics and courier workers to choose the shifts that best suit them, creating their own schedule.

About online sales

The digital business for the X5 Group is the most important source of growth, Salakhutdinov stated. According to him, in the second quarter of 2024, the group’s online revenue increased by 79% year-on-year, and the revenue of X5 Digital, responsible for the development of the digital business, by the end of this year “should approach 200 billion rubles ”.

The first deputy general director of the company expects that in the coming years the share of online sales of the X5 Group will exceed 10% of its total turnover, and in Moscow and other large Russian cities it will be even higher. At Perekrestok (part of the group), this figure already exceeds 10% and will exceed 20% in the coming years, the manager added.

About offline sales

In Russia, about 30% of the retail market is currently occupied by convenience stores, and the share of this format will grow, Salakhutdinov is sure. “In this segment we are represented by the Pyaterochka chain, which brings together almost 22 thousand stores. Under this brand we will continue to open several thousand establishments a year,” the manager shared about his plans.

Furthermore, the first deputy CEO of the X5 group mentioned hard discounters as a segment that will soon become the second in terms of turnover growth. The group already has one such discount store, Chizhik, the number of stores of which the company plans to double in the coming years (as of September 2024, Chizhik has 2 thousand points throughout Russia).

Another retail project, Okolo stores, is being developed under a flexible franchise model. “Okolo is basically a technological platform to which stores and distributors can connect, of which there are already more than ten,” Salakhutdinov explained. In his words, Okolo now has just over 500 stores, the group will open its thousandth store in December and 10 thousand by 2028.

About the development of coffee.

We are talking about the Select coffee chain, which operates under the leadership of Perekrestok. The manager states that the cafeteria is, on the one hand, a “point of attraction” and, on the other, “a sales engine for prepared food.” X5 Group also set a goal for Select to have “the best coffee on the market at a price several times lower than comparable coffee shops.”

“We see approximately 500 locations that fit the format of our current Select coffee shop model. By the end of 2024, 87 points should be opened, and in one or two years, all 500,” shared the first deputy general director of the X5 Group. As of August 2024, a total of 260 cafes were operating in Perekrestok.

• According to the results of the first six months of 2024, the X5 Group’s revenue amounted to 1.8 trillion rubles and net profit – 53.6 billion rubles, according to the company’s report.