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Russian retailer Lenta undeterred by Ukraine crisis

The head of a leading Russian hypermarket chain has shrugged off the ongoing crisis in Ukraine, and signaled willingness to open a store in Crimea over the long-term.

"A Crimea store in the long-run, provided the political situation becomes clear, is of course welcome," Jan Dunning, CEO of St Petersburg-headquartered Lenta, told CNBC on Thursday.

"I think for us it is important to wait for further developments… Crimea for now is not in our plan."

A customer counts ruble banknotes to pay for goods at a Lenta supermarket in Moscow, Russia.
Bloomberg | Getty Images
A customer counts ruble banknotes to pay for goods at a Lenta supermarket in Moscow, Russia.

The breakaway of Crimea from Ukraine marked a key pressure point in the crisis, after the region's residents voted overwhelmingly in favor of joining Russia.

Dunning said that consumer demand in Russia was unaffected by the ongoing conflict with Ukraine, but that Western sanctions on the country had weakened the rouble. Over the year-to-date, the dollar has risen almost 8.5 percent against the Russian currency.

As a result, Lenta was looking to source products from within Russia, or from China.

"If you look at imports, there is a direct impact on the exchange rate which is partially transferred into the consumer price in Russia. So we have started to look for different sourcing – are their similar products available in China or in Russia itself?" said Dunning.

Also on Thursday, Lenta reported robust sales growth of 37.3 percent for the first quarter, during which the chain opened two new hypermarkets.

Dunning said Lenta's expansion plans were undeterred by the Ukraine-Russia turmoil, with plans to open 24 hypermarkets and 15 supermarkets in 2014.

The chief executive is a veteran of the region, having joined Lenta in 2009, after working for Metro Cash & Carry Ukraine.

"The Russian retail market is the fastest growing food retail market in Europe… and it is the lowest penetrated in modern retail," he said.

"So we see this as a very good place to be and it is also a very good place to grow our market."

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