Customers exit a Dixy store. Photo from Retail & Loyalty

Dixy: Russian Grocery Store Chain

Published: January 5, 2019

Dixy is a chain of discount grocery stores in Russia, known best for serving low-income areas. It is known to be pretty low quality, but has good distribution and low prices. It operates all over Russia, but has its strongest presence in the western part of the country.

Dixy was founded in 1992. The first store in its current retail format opened in Moscow at that time. Later, much of its growth focused on city outskirts, but eventually penetrated to more neighborhoods deeper into major cities. It had an initial public offering in 2007, garnering $360 million. The majority shareholder is a company called Mercury, which was founded as a food and alcohol importer by Russian billionaire Igor Kesaev.

Dixy is known for somewhat garish, but effective marketing. Its stores are usually bright orange and it has been successful with marketing campaigns in which tiny toys are given to customers for every 500 rubles spent. Although intended to appeal primarily to customer’s kids, on a couple of occasions, these caught on and became brief pop culture sensations, with customers actively trading them online – or even selling them for surprising sums – as individuals tried to complete whole sets.

Dixy is currently one Russia’s larger chains, but there are some potentially worrying signs for its future. One estimate puts its 2016 market share at 3.8%, with a projected 2021 market share of 3.2%. Such a scenario would see fellow store Lenta , with which it is currently tied for third place in Russia’s retail food market, decisively push it to fourth place. Dixy’s 2015 revenue came in at $4.2 billion and it opened 408 new stores in the first nine months of 2016. The company is traded on the Moscow stock exchange under the ticker DIXY.

Dixy’s falling earnings are generally attributed to rising costs from marketing, staff, and rents. A possible reason for some of these struggles is a shift to more expensive operating areas inside city centers. It has stated its desire to cut costs in part by renegotiating rent agreements.

Overall, Dixy is a good place to go if one wants a lot of choices at lower prices and does not mind lower quality. The company is definitely facing some problems that could see it slip in the increasingly competitive grocery store market in Russia.

Shopping at a Dixy store in Moscow.

About the author

Greg Tracey

Greg Tracey is a junior at the University of Nebraska – Lincoln. He is studying economics and international relations, as well as minoring in mathematics and Russian. As a Home and Abroad Scholar, he is focusing on business and economic issues in Russia and surrounding countries. The related scholarship will help fund his participation in SRAS's Russian as a Second Language program at St. Petersburg State University of Economics during the Spring 2019 Semester. In his free time, he enjoys reading and soccer.

Program attended: Home and Abroad Scholar

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