Okey-Dokey: Russian Retailer Eyes Florida

MIAMI — The Russians are coming.

A firm headed by a Russian retailer, with backing from Dutch investors, is seeking to build a chain of small food stores in South Florida. AgroTrade International has begun scouting for retail sites and hiring workers for a chain it said could have 400 stores and $1 billion in revenue within four years, according to various job postings by the group.

The planned rollout is backed by a $500 million
investment from the private Dutch investment fund that launched Russia’s X5 Retail Group, including the discount chain Pyaterochka and the Karusel chain of hypermarkets.

Andrey Rogachyov, a Russian billionaire who founded those chains and was an investor in X5, separately heads AgroTrade International.

AgroTrade is currently looking to lease sites of between 4,200 square feet and 7,500 square feet in the Miami area, according to its website. Local sources told SN the group was considering naming the stores “Okey-Dokey,” which is one of several trademarks the group has applied for, U.S. trademark records show. AgroTrade has also sought to register trademarks for Okie-Dokie, Doke, OK Point, O’Key, O’Kay, Real Buy Nearby, Voila!, Bonjour and Delizio.

“A private Dutch investment fund is launching a $500 million retailing project bringing in cash earnings from its previous investments in grocery distribution in Europe,” an ad seeking category managers posted at several job sites last week read. “The project is managed by the same group of young and savvy executives who successfully developed two national retailers in Eastern Europe for the investor.”

Officials of AgroTrade did not respond to SN’s requests for further comment by last week’s deadline.

Local sources last week said the group has been meeting with area real estate professionals in search of sites, looking especially for those in close proximity to the area’s leading conventional grocer, Publix Super Markets.

“They seem like true players, and they know their product lines and their SKUs,” one local real estate source said. “They’re definitely looking around and definitely putting in offers.”

According to the company website, AgroTrade operates stores with an everyday-low-price format and guaranteed quality goods.

It appears that the store envisioned by AgroTrade would resemble a cross between a small discounter like Aldi and a convenient consumables seller like Dollar General. The store would carry around 3,000 SKUs and include branded goods, according to local sources and job descriptions. Bringing a similar vehicle to Russia with the Pyaterochka chain in 1999 made a fortune for founder Rogachyov.

However, replicating its success in a mature U.S. market will be a bigger challenge, according to Mylos Ryba, a London-based senior retail analyst for Planet Retail.

“Both formats, Karusel and Pyaterochka, were one of the first modern grocery formats in Russia. Their great locations, low pricing and wide range of products made them successful [from] 2000-2010,” Ryba told SN. “It is important to say that the Moscow and St. Petersburg grocery market was underdeveloped until 2007, and the level of competition was very low or even non-existent.

“There is a massive difference between operating a grocery chain in Russia and in the USA,” Ryba added. “Russian grocery retail is more about store expansion rather than store efficiency, consumer needs and sophisticated retailing. He has to have a very different business strategy for the USA.”

Doron Valero, managing partner for Miami-based developer Global Fund Investments, said he felt the Miami market could absorb a small grocery format, particularly in urban markets. However, he deemed it unlikely that the company would open as many as 60 such stores this year, as indicated in some published reports from Russia last week.

“There is room here for small urban stores, no doubt,” Valero said. “I don’t think there’s room for another supermarket chain like Publix but for a 7,000-foot urban grocery? I could see that.”