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Russian retailers embrace hard discount trend

Russian retailers embrace hard discount trend

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As soaring food prices and a years-long economic slump force Russians to tighten their belts, retailers are tapping surging demand for no-frills hard discount stores.

With incomes increasingly stretched, Fix Price, a discount business akin to Poundland in the UK and Dollar Tree in the US, is one of the country’s fastest-growing companies — and raised $2bn in the largest initial public offering of any Russian group for nearly a decade in March.

Now, grocers are following its lead. Svetofor, a Siberia-based chain where customers shop from cardboard boxes on the floor, lifted its revenue 39 per cent last year to Rbs189bn ($2.5bn) — a faster growth rate than any other Russian supermarket operator.

X5 and Magnit, Russia’s top two food retailers, are opening hundreds of similar hard discounters, and hypermarket leader Lenta is experimenting with the format as the companies seek to adapt to Russians’ decreasing purchasing power.

Real incomes are down 11 per cent since 2013, while as many as 20m Russians live below the poverty line. Rising food prices have added to the pressure.

During President Vladimir Putin’s annual call-in show last week, one woman dialled in from a supermarket in southern Russia to complain that even locally grown vegetables are unaffordable.

The first Russian business to catch the discount wave was Fix Price, which sells roughly 1,800 mostly non-food products for less than Rbs250 ($3.40) and lifted its revenues 33 per cent last year to Rbs190.1bn. It recently opened its 4,500th store in Russia and six other former Soviet states and is planning further expansion abroad.

“The worse the macroeconomic situation gets or the more people whose incomes fall, the better things are for us,” Sergei Lomakin, Fix Price co-founder, told the FT.

Russia's largest retailers struggle to keep pace

Lomakin and his co-founder Artem Khachatryan, previously shareholders in low-cost supermarket Kopeyka, launched Fix Price in 2007 after studying the low-overhead, high-margin model of dollar stores in other countries and seeing a gap in the Russian market.

“We had the right model at the right time,” Lomakin said. “The way you offer the best prices is by beating your competitors on price and offering a better service. You have to make more than you spend, sell cheaper than everyone else, and the in-store experience has to be better.”

Discount stores are a departure from major retailers’ innovations in recent years, which have focused on brightening up often drab stores, introducing online delivery and expanding ranges with previously scarce produce such as avocados and kale. Vkusvill, a chain that styles itself on Trader Joe’s, is Russia’s second-fastest growing grocer after Svetofor.

But now the largest grocers are trying to balance their portfolios.

Covering more bases

Magnit launched Moya Tsena and aims to open 200 stores by the end of the year. The focus on own-brand goods makes it a natural fit for Magnit, which is based in Krasnodar in Russia’s farming belt and owns four farms and 13 of its own production facilities.

Russian food retailer X5
X5 is one the largest supermarket operators in Russia

Yet low prices will not be enough to attract customers, according to chief executive Jan Dunning.

“Our customers trade up, they don’t trade down. They move much more in value. That doesn’t mean there isn’t space for the poor economy — as a retailer, you try to build a format portfolio that covers as much customer demand as possible,” Dunning said.

X5 launched its Chizhik format last October and plans to operate 45 of them by the end of the year.

Chizhik aims to beat X5’s own grocery store Pyaterochka — Russia’s largest supermarket chain with Rbs1.6tn in revenue last year and 16,709 stores — by 15 to 20 per cent on price through focusing on own-brand goods, which make up 70 per cent of the assortment, and limiting their variety.

“If you go to Pyaterochka, there’ll be five or six different cartons of milk. In Chizhik there’ll be two of them but they’ll be good quality,” said X5 chief executive Igor Shekhterman. “We’re helping the buyer by studying which milk is the most popular.”

X5 is also aiming to offer a better customer experience through store design. “When a customer goes to Chizhik, he’s not going to feel [like] he’s in Svetofor,” Shekhterman said. “Our concept is different. We’re trying to make the customer feel comfortable.”

Lenta, the largest hypermarket retailer, is exploring the format but has not embraced it as quickly as X5 and Magnit.

“We are much more focused on quality and service. Costs matter, but not only,” owner Alexei Mordashov, Russia’s richest man, told the FT. “If you speak about hard discounters, we still don’t know if we should move there because it’s a different segment.”

Consumer mind shift

Russian consumers have become increasingly sensitive to price as they spend more time online, according to Marat Ibragimov, an analyst at Gazprombank. Popular videos on YouTube feature shoppers rummaging through Svetofor and Fix Price in search of bargains.

Meanwhile, consumers “don’t want to go to large boxes which would take several hours of their precious time and — on top of that — would force them to buy a lot of unnecessary items,” said Ibragimov.

“In that respect, hard discounters are a perfect solution for these consumers. They offer a selected range of most demanded products at a very attractive price. Plus they’re located in proximity to residential areas which guarantees reasonably short time spent on shopping.”

The internet-driven search for lower prices has pushed Fix Price to explore building an ecommerce platform having previously avoided the web. The pandemic drove a threefold increase in the e-grocery business to Rbs135bn in turnover last year, according to researcher Infoline.

But Lomakin pointed out “our logistics cost several times less than online does”.

Still, the major retailers are well positioned to move into hard discounting, said Ibragimov, as they can increase margins by using some goods as loss leaders.

“Retailers always benefit from the fact they could sell the most demanded items, which are always considered traffic builders, at the lowest price, because it simply guarantees that they would attract shoppers to their stores,” he added.

Lomakin is counting on the growth in hard discount supermarkets to benefit Fix Price.

“We have what they don’t because they don’t make money on what we have,” he said. “Our goods are mostly impulse buys that people get when they see the low price. The discounters that are appearing now are going to benefit from us being next door.”

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Taliban take over Afghanistan: What we know and what’s next

Taliban take over Afghanistan: What we know and what’s next
Afghan people climb atop a plane as they wait at the Kabul airport on Aug. 16, 2021. WAKIL KOHSAR/AFP via Getty Images

The Taliban have seized power in Afghanistan two weeks before the US was set to complete its troop withdrawal after a costly two-decade war.

The insurgents stormed across the country, capturing all major cities in a matter of days, as Afghan security forces trained and equipped by the US and its allies melted away.

Here is a look at what happened and what comes next:

WHAT IS HAPPENING IN AFGHANISTAN?

The Taliban, a militant group that ran the country in the late 1990s, have again taken control.

The US-led invasion of Afghanistan in 2001 ousted the insurgents from power, but they never left.

After they blitzed across the country in recent days, the Western-backed government that has run the country for 20 years collapsed.

Afghans, fearing for the future, are racing to the airport, one of the last routes out of the country.

WHY ARE PEOPLE FLEEING THE COUNTRY?

They are worried that the country could descend into chaos or the Taliban could carry out revenge attacks against those who worked with the Americans or the government.

Many also fear the Taliban will reimpose the harsh interpretation of Islamic law that they relied when they ran Afghanistan from 1996 to 2001.

Back then, women were barred from attending school or working outside the home. They had to wear the all-encompassing burqa and be accompanied by a male relative whenever they went outside.

The Taliban banned music, cut off the hands of thieves and stoned adulterers.

The Taliban have sought to present themselves as a more moderate force in recent years and say they will not exact revenge, but many Afghans are skeptical of those promises.

WHY ARE THE TALIBAN TAKING OVER NOW?

Probably because US troops are set to withdraw by the end of the month.

The US has been trying to get out of Afghanistan, its longest war, for several years now.

American troops ousted the Taliban in a matter of months when they invaded to root out Al-Qaeda, which orchestrated the 9/11 attacks while being harboured by the Taliban.

But it proved more difficult to hold territory and rebuild a nation battered by repeated wars.

As the US focus shifted to Iraq, the Taliban began to regroup and in recent years took over much of the Afghan countryside.

Last year, then-President Donald Trump announced a plan to pull out and signed a deal with the Taliban that limited US military action against them.

President Joe Biden then announced that the last troops would leave by the end of August.

As the final deadline drew close, the Taliban began a lightning offensive, overrunning city after city.

WHY DID THE AFGHAN SECURITY FORCES COLLAPSE?

The short answer? Corruption.

The US and its NATO allies spent billions of dollars over two decades to train and equip Afghan security forces.

But the Western-backed government was rife with corruption. Commanders exaggerated the number of soldiers to siphon off resources, and troops in the field often lacked ammunition, supplies or even food.

Their morale further eroded when it became clear the US was on its way out. As the Taliban rapidly advanced in recent days entire units surrendered after brief battles, and Kabul and some nearby provinces fell without a fight.

WHAT HAPPENED TO THE PRESIDENT OF AFGHANISTAN?

He fled.

President Ashraf Ghani hunkered down and made few public statements as the Taliban swept across the country.

On Sunday, as they reached the capital, he left Afghanistan, saying he had chosen to leave to avoid further bloodshed.

It’s not clear where he went.

WHY ARE PEOPLE COMPARING AFGHANISTAN TO THE FALL OF SAIGON?

The Fall of Saigon to North Vietnamese forces in 1975 marked the end of the Vietnam War.

It became an enduring symbol of defeat after thousands of Americans and their Vietnamese allies were airlifted out of the city on helicopters.

US Secretary of State Antony Blinken has rejected any comparisons to Afghanistan, saying: “This is manifestly not Saigon.”

WHAT WILL HAPPEN NEXT IN AFGHANISTAN?

It’s not clear.

The Taliban say they want to form an “inclusive, Islamic government” with other factions. They are holding negotiations with senior politicians, including leaders in the former government.

They have pledged to enforce Islamic law but say they will provide a secure environment for the return of normal life after decades of war.

But many Afghans distrust the Taliban and fear that their rule will be violent and oppressive.

One sign that worries people is that they want to rename the country the Islamic Emirate of Afghanistan, which is what they called it the last time they ruled.

WHAT DOES THE TALIBAN TAKEOVER MEAN FOR WOMEN?

Many fear it could mean a severe rollback of rights.

Afghan women have made major gains since the overthrow of the Taliban.

Many are worried they will once again be confined to their homes.

The Taliban have said they are no longer opposed to women attending school but have not set out a clear policy on women’s rights.

Afghanistan remains an overwhelmingly conservative country, especially outside major cities, and the status of women often varied, even under Taliban rule.

WILL THE TALIBAN ONCE AGAIN HARBOUR AL-QAEDA?

That is anyone’s guess, but American military officials are worried.

In the peace deal signed with the United States last year, the Taliban pledged to fight terrorism and prevent Afghanistan from again becoming a base for attacks.

But the US has little leverage to enforce that.

Technological advances over the last 20 years allow the United States to target suspected militants in countries like Yemen and Somalia where it does not have a permanent troop presence.

The Taliban paid a heavy price for their role in the Sep 11 attacks and likely hope to avoid a repeat as they seek to consolidate their rule.

But earlier this year, the Pentagon’s top leaders said an extremist group like Al-Qaeda may be able to regenerate in Afghanistan, and officials are now warning that such groups could grow much faster than expected.

Afghanistan is also home to an Islamic State group affiliate that has carried out a wave of horrific attacks targeting its Shiite minority in recent years. The Taliban have condemned such attacks and the two groups have fought each other over territory, but it remains to be seen whether a Taliban government will be willing or able to suppress IS. AP

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Malala Yousafzai ‘Deeply Worried About Women, Minorities’ As Taliban Takes Kabul

Malala Yousafzai ‘Deeply Worried About Women, Minorities’ As Taliban Takes Kabul

The activist, who survived a Taliban attack, called for urgent humanitarian aid to Afghanistan.

Activist Malala Yousafzai voiced grave concerns for women, minorities and human rights activists after the Taliban seized control of Afghanistan.

Yousafzai, who was shot in the head by Taliban gunmen in Pakistan when she was 15, said on Sunday she was watching on in complete shock as Taliban forces advanced into Kabul after executing a near-complete takeover of the country in a little over a week.

“I am deeply worried about women, minorities and human rights advocates,” she said. “Global, regional and local powers must call for an immediate ceasefire, provide urgent humanitarian aid and protect. refugees and civilians.”

Yousafzai was targeted by extremists in 2012 after she spoke out publicly about the right to education for girls and women. She was shot on her school bus. She survived, went on to continue her advocacy from the UK, and in 2014, was awarded the Nobel Peace Prize.

On Sunday, Afghan President Ashraf Ghani fled the country, U.S. Embassy staff were evacuated and several other western missions worked to withdraw personnel. It comes months after the Biden administration announced the withdrawal of a decades-long U.S. military presence in the country.

Many fear the insurgents will roll back decades of gains by women and ethnic minorities, reimposing the brutal rule that all but eliminated women’s rights, the Associated Press reported. AP

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Video Shows Afghans Clinging To U.S. Military Plane As It Takes Off In Kabul

Video Shows Afghans Clinging To U.S. Military Plane As It Takes Off In Kabul

Seven people were reportedly killed during the chaos, including individuals who fell from a departing American transport jet.

Stunning video taken Monday at the Kabul airport shows people clinging to a U.S. military transport plane during takeoff, as well as others appearing to plunge to their death from the sky, in a disturbing scene that reportedly ended with several people dead.

The U.S. military suspended evacuation flights from the Afghan capital later on Monday due to the swarms of people blocking the airport’s tarmac, a spokesperson for the German foreign ministry told reporters.

“I understand there is no air traffic at the moment because a large number of desperate people are crowding the tarmac,” the spokesperson told journalists in Berlin, according to Reuters.

The chaos ended with seven people dead, including those who fell from a departing American military transport jet, The Associated Press reported, citing senior U.S. military officials.

Disturbing videos posted to social media appear to capture some of the deaths, and seem to show bodies falling from a plane shortly after takeoff. The authenticity of these videos has not been independently confirmed by HuffPost.

The Taliban has meanwhile attempted to reassure Afghans, saying in a statement that “life, property and honor” will be respected. But many Afghans fear that the Islamic militants will roll back basic democratic and human rights, particularly for women, journalists and nongovernment organization workers.

“Everyone is worried,” a former government employee who is hiding in Kabul told Reuters. “They’re not targeting people yet but they will, that’s the reality. Maybe in two or three weeks. That’s why people are fighting to get out now.” AP/REUTERS

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What is the Relationship Between the Taliban and ISIS?

What is the Relationship Between the Taliban and ISIS?
Taliban fighters stand guard in a vehicle along the roadside in Kabul on August 16, 2021, after a stunningly swift end to Afghanistan's 20-year war. (AFP)

Who are the two groups?

The Taliban and Isis are both Sunni Islamist extremist groups seeking to form authoritarian states under strict Sharia law and prepared to use violence to achieve their aim.

The two forces are actually enemies, however, who have fought bitterly since 2015 when Isis formed the Islamic State-Khorasan Province (ISKP) in Afghanistan at a time when it was first seeking to extend its geographical reach beyond Iraq and Syria.

The Taliban first came to prominence in 1994 during the Afghan Civil War, its ranks composed largely of students – from which the group derives its name in Pashto – many of whom had been mujahideen resistance fighters who had battled occupation by the Soviet Union in the 1980s.

A Deobandi fundamentalist Islamist movement originating in the Pashtun areas of eastern and southern Afghanistan and in northern Pakistan, the Taliban was led by Mullah Mohammed Omar and conquered first the province of Herat and then the whole country by September 1996, overthrowing the Burhanuddin Rabbani regime, establishing the Islamic Emirate of Afghanistan and making Kandahar the capital.

Its tyrannical rule, marked by the massacre of opponents, the denial of UN food supplies to starving citizens and the oppression of women, was brought to an abrupt end by US-led coalition forces in December 2001 in retaliation for Osama Bin Laden’s devastating al-Qaeda terror strike on the World Trade Center in New York City, which killed 2,996 people and left 25,000 injured.

Since then, Taliban fighters have regrouped as an insurgency and continued to battle to retake Afghanistan from US peacekeeping forces ever since.

Isis meanwhile was first formed by Jordanian jihadist Abu Musab al-Zarqawi in 1999 before rising to global prominence when it drove Iraqi forces out of key cities in the west of the country in 2014 – having declared itself a worldwide caliphate – and later conquered swathes of eastern Syria before ultimately surrendering Mosul and Raqqa in 2017 when international forces intervened.

It established the ISKP in the Nangarhar Province of eastern Afghanistan in January 2015, actively recruiting defectors from the Taliban, in particular those who were disconttented with their own leadership’s lack of success on the battlefield.

How have their respective factions interacted?

The formation of ISKP prompted Taliban leader Mullah Akhtar Mohammad Mansour to write a letter to his Isis counterpart, Abu Bakr al-

More battles erupted in April 2017 when ISKP captured three drug dealers selling opium to raise funds for the Taliban in the northern Afghan province of Jowzjan and again in May 2017 when 22 militants were killed in clashes between the two sides along the Iranian border.

The Taliban launched an offensive to clear Isis out of Jowzjan the following summer, with the the Islamic Movement of Uzbekistan joining in on the latter’s side, as up to 7,000 people were displaced from their homes.

That July’s conflict ended in a significant defeat for ISKP, who suffered further setbacks in skirmishes the following year before being almost entirely eradicated by the US and the Afghan military in late 2019, although the Council for Foreign Relations estimates that there are still 2,200 members of ISKP still active in Afghanistan.

In February 2020, the Donald Trump administration signed its dubious peace accord with the Taliban in Doha, Qatar, which saw the latter group pledge to keep other Islamist extremists, including Isis, out of the country.

Why are we asking this now?

Afghanistan is again in a state of turmoil after the Taliban recaptured the capital city of Kabul on Sunday, declaring the country an Islamic Emirate once more after president Ashraf Ghani abandoned the presidential palace and fled to Tajikistan.

The operation followed swiftly on from the withdrawal of American troops from the country last month at the order of US president Joe Biden, their exit coming almost 20 years after the US military drove the same faction out of Kabul at the outset of George W Bush’s War on Terror in response to 9/11.

Biden expressed his determination not to hand the responsibility for policing Afghanistan on to a fifth commander-in-chief following the completion of his own tenure in the White House and trusted in the Afghan military, in whom the US had invested almost $1trn over two decades, to keep the Taliban at bay.

“The fact of the matter is we’ve seen that that force has been unable to defend the country… and that has happened more quickly than we anticipated,” US secretary of state Anthony Blinken lamented on Sunday.

Amid the chaotic scenes in Kabul as people fled for the airports was the alarming sight of 5,000 escaped prisoners walking free from the Pul-e-Charki prison on Bagram air base, occupied by the Americans until recently, with alleged Isis and al-Qaeda fighters present among their number.

Speaking on NPR’s All Things Considered last week, former US defence secretary Leon Panetta gave this blunt assessment of the disaster unfolding: “The Taliban are terrorists, and they’re going to support terrorists. If they take control of Afghanistan, there is no question in my mind that they will provide a safe haven for al-Qaeda, for Isis and for terrorism in general. And that constitutes, frankly, a national security threat to the United States.”

Baghdadi, calling on him to abandon his recruitment drive of the disaffected and arguing that any war for their comparable cause in Afghanistan should be carried out under Taliban leadership.

Fighting duly broke out between the two sides that June 2015 and between two separate factions of the Taliban in the Zabul Province that November over whether or not to join forces with ISIS. INDEPENDENT

 

 

 

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1/3 of Israel’s Older Population Has Received COVID-19 Booster Shot as Delta Cases Rise

1/3 of Israel’s Older Population Has Received COVID-19 Booster Shot as Delta Cases Rise
An Israeli medical worker prepares a dose of the Pfizer-BioNTech coronavirus vaccine during a campaign by the Tel Aviv-Yafo Municipality to encourage the vaccination of teenagers on July 5 in Tel Aviv. (Jack Guez/AFP/Getty Images)

Over one-third of Israel’s older population has received a COVID-19 booster shot, as the country rushes to administer additional vaccine doses to counter the spread of the highly contagious Delta variant.

Israeli Prime Minister Naftali Bennett said Sunday that over 420,000 Israelis older than 60 have so far received a third dose of the Pfizer/BioNtech vaccine. According to government statistics, that number is expected to exceed half a million by the end of the day, the Associated Press reported.

Israel began rolling out COVID-19 booster shots to its older population last weekend, after health officials reported new data indicating a decline in vaccine protection over time. The country had previously offered a third dose of the vaccine to some people with compromised immune systems, such as individuals with cancer.

The latest rollout comes as hospitalizations and daily case counts continue to rise due to the delta variant. Last week, Israel began recording an average of more than 3,000 new coronavirus cases a day, with 250 people in serious condition. That marks its worst outbreak since April, according to Agence France-Presse.

On Saturday, the country recorded 4,211 new cases and 19 new deaths. In response to the latest outbreak, the government recently moved to reinstated its mask mandate for indoor settings and is now weighing more restrictions.

Israel quickly became a world leader in vaccinating against the virus during its initial public campaign. By Sunday, nearly 60 percent of the country’s 9.3 million population has been fully vaccinated, with more eligible people now rushing to receive a third vaccine dose.

Israel booster shot
Over one-third of Israel’s older population has received a COVID-19 booster shot, as the country rushes to administer additional vaccine doses to counter the spread of the highly contagious Delta variant. In this photo, Israel’s Prime Minister Naftali Bennett accompanies his mother Myrna Bennett as she receives her third COVID-19 vaccine shot, at a Maccabi Healthcare Services clinic in the northern city of Haifa on August 3, 2021. POOL / AFP/Getty Images

While most vaccine makers and researchers agree that booster shots will be needed to provide additional protection against the virus, the World Health Organization (WHO) last week called for a moratorium on the use of third doses until the end of September in order to address inequalities in global vaccine distribution.

In response to the moratorium, Bennett said Thursday that Israel was doing the world a “great service” by administering the booster shots.

“Israel is going ahead here with something that dramatically contributes to global knowledge,” he said in a Facebook broadcast. “Without us, the world wouldn’t know the exact efficacy levels of the booster shots, wouldn’t know the dates, how much they affect infections, how they affect severe illness,” he added.

The U.S. Food and Drug Administration (FDA) has yet to approve of the use of coronavirus vaccine boosters for the American public. However, data from the CDC indicates that an increasing number of Americans are using dishonest means to receive a third jab.

Moderna has estimated that a COVID-19 vaccine booster could ready for use in the U.S. by the winter, and Pfizer is said to be preparing a booster shot for FDA approval soon.

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Israel attacks Hamas sites in Gaza in response to fire balloons

Israel attacks Hamas sites in Gaza in response to fire balloons
The Israeli military said its air raids were in 'response to continual launches of incendiary balloons from Gaza into Israel throughout the day' [File: Jack Guez/AFP]

Palestinians say the balloons aim to pressure Israel to ease restrictions on the coastal enclave that were tightened in May.

Israeli aircraft bombed Hamas sites in the Gaza Strip on Saturday in response to incendiary balloons launched from the Palestinian enclave, Israel’s military said.

There were no immediate reports of casualties or damage from the attack that targeted what the Israeli military said was a rocket launching site and a compound belonging to Hamas, the political group that governs Gaza.

Hamas had no immediate comment.

A social media post by New Press publication, showed streaks of lights coming from Gaza, as shots were fired targeting Israeli planes in retaliation of the attack.

New Press also reported that three sites were targeted by Israel including Beit Hanoun and Jabalya.

Since a May 21 ceasefire ended 11 days of Israel-Hamas fighting, Palestinians in Gaza have sporadically launched balloons laden with incendiary material across the border, causing fires that have burned fields in Israel.

The incendiary balloons have been used previously in response to the tightening of Israel’s blockade on the coastal enclave, after new restrictions were issued during Israel’s bombardment of Gaza in May.

Balloon launches had mostly ebbed after Israel eased some restrictions on Gaza.

But on Friday, balloons were again launched from Gaza, causing at least four brush fires in areas near the Israel-Gaza frontier.

The Israeli military said its air raids were in “response to continual launches of incendiary balloons from Gaza into Israel throughout the day”.

The blazes along the Gaza frontier broke out on Friday as Israel separately traded fire over its northern border with Lebanon’s Iran-backed Hezbollah, in a third day of cross-border salvoes amid wider regional tensions with Iran.

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