Grocery franchises: partners move to larger chains

Competition for existing shops is intensifying in Russia’s grocery franchise sector. According to Infoline figures published by Kommersant on 19 October, the number of franchised grocery outlets reached 20,400 by the end of August 2026 — up 23% year on year. Meanwhile, the number of shops belonging to regional grocery franchise chains fell by 2.3% from the start of the year, to 11,900. Experts attribute this divergence partly to business owners switching to larger chains.

How shop numbers have changed

Between January and August 2026, the number of Domashkino shops fell by 10% to 1,500. Fasol, the franchise developed by Metro, saw its total decline by 8.2% to 1,100. The Avocado chain, part of the Sladkaya Zhizn group, contracted by 1.1% to 5,800 outlets.

Against this backdrop, Okolo, part of X5, is expanding most rapidly. The number of shops trading under its brand has almost doubled since the start of the year, reaching 8,300. According to the published figures, this chain accounts for most of the increase in franchised grocery shops.

When comparing these figures, it is important to note the different reporting periods: the overall increase of 23% is year on year, while the decline in regional chains and Okolo’s expansion are measured from the start of 2026. These figures show contrasting trends, but do not allow a direct calculation of how much of one chain’s growth came from another’s former partners.

A fall in the number of shops trading under a particular brand should not automatically be taken to mean that those outlets have closed. As experts note, some business owners continue trading while changing their franchise partner.

Growth through rebranding

According to Mikhail Burmistrov, chief executive of Infoline-Analytics, growth in franchised grocery shops is driven primarily by rebranding and updating the appearance of existing independent outlets, rather than opening new shops.

This is an important distinction when assessing the development of the franchise sector. An existing shop joining a chain increases the number of outlets under that brand, but does not in itself mean an additional shop has opened in the town or neighbourhood. Chain expansion statistics should therefore be distinguished from figures for newly built premises and shops opening at new locations.

Anna Rozhdestvenskaya, an expert at Franshiza.ru, links a substantial share of the decline in regional chains to business owners moving to Okolo. In her assessment, switching grocery franchises requires relatively little investment: rebranding a shop costs less than changing the concept of a foodservice business.

Experts cite opportunities to earn additional income from parcel lockers, 5Post parcel collection points and coffee vending machines among the advantages of Okolo’s offering. Joining the chain is therefore not just about adopting a new brand, but also about finding additional uses for an existing retail outlet. However, the published figures do not reveal exactly how many shops have joined from each competitor.

Why shop-level profitability is becoming decisive

This shift in franchise partners is taking place as grocery retailers face mounting pressure. Alexey Vanchugov, managing partner at Vanchugov and Partners, points to low profitability, long investment payback periods and declining demand for franchises. Other factors cited by experts include expensive credit and weaker consumer spending.

The scale of the pressure is also evident beyond the franchise sector. According to the figures cited, net growth in retail floor space among the 200 largest fast-moving consumer goods chains fell by 46.2% year on year, to its lowest level since 2011. This indicator measures the pace of retail expansion, not the number of franchise agreements.

A Franshiza.ru survey provides another signal: looking back on 2025, 43% of franchisors surveyed reported declining investor interest. This result should not be interpreted as applying only to grocery chains, as the published information does not specify such a restriction.

Yury Mikhailichenko, president of the Russian Franchise Association, notes that joining a major brand gives an independent shop access to an established business model and more favourable purchasing terms. With profitability under pressure, these day-to-day operating terms are becoming an important consideration when choosing a partner.

Regional chains are still opening outlets

A decline in total shop numbers does not mean new openings have stopped. Olga Moiseeva, head of the Avocado project, said that partners opened 840 outlets in Central Russia and the Volga region during the first nine months of 2026, exceeding their target.

This result cannot be compared directly with the chain’s 1.1% contraction between January and August: the periods differ, and the number of openings and the total number of operating shops are different measures. New outlets can open while other partners leave.

Metro, meanwhile, said that more than 12% of Fasol franchisees operate two or more shops. Multi-site partners therefore remain active within these chains even as the overall number of outlets declines.

Practical takeaway: prospective franchisees should assess not only a brand’s growth rate, but also its purchasing terms, rebranding costs and opportunities for additional income. Opening figures are best checked against the net change in operating shops: one measure is no substitute for the other.