CARREFOUR SA, the world's second-largest retailer, will spend US$100 million to open stores in southwestern Russia as it enters Europe's fastest-growing market.

An investment accord was signed last Friday by Jacobo Caller, its Russia director, and Tatiana Evsikova, deputy governor of the Krasnodar region, the Paris-based company said yesterday. The first local store will open at the beginning of 2009 in the city of Krasnodar, it shows.

Carrefour has set a goal of opening its first Russian super-store this year as energy exports feed a 10th straight year of economic growth, enabling more shoppers to turn away from open markets, Bloomberg News reported. The retailer aims to catch up with the likes of Metro AG and get a jump on Wal-Mart Stores Inc, which is looking at expansion into the country.

"Krasnodar is a region with considerable economic potential and a favorable investment climate," Chief Executive Officer Jose Luis Duran said at an economic forum in the Black Sea resort city of Sochi, where the agreement was signed, according to the statement. "It will be one of the first regions in Russia where Carrefour will operate."

The planned investment will take place over five years and will ensure "support" by the regional government "in finding suitable land plots for lease or purchase and connecting stores to municipal infrastructure," the company said.

Carrefour fell 80 cents, or 2.3 percent, to 33.30 euros (US$48.5) in Paris trading. The stock has dropped 37 percent this year, the most in the nine-company Bloomberg Europe Food Retailers Index, which has slid 26 percent.

Other foreign companies are flocking to Russia, where the retail market may expand about 22 percent annually through 2010 as incomes climb, UBS AG has estimated.