UPDATE 1-Russia's top retailer says Wal-Mart coming soon

* X5 CEO says Wal-Mart has ambitious plans for Russia

* X5 negotiating possible Russian retailer takeovers

* Considering "big merger" in Ukraine

* Could issue shares for big acquistion

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ST PETERSBURG, Russia, June 4 (Reuters) - Russia's top grocer, X5 (PJPq.L), expects Wal-Mart (WMT.N) to come to Russia soon and believes the U.S. giant has ambitious plans for the national market, X5 Chief Executive Lev Khasis said on Thursday.

"Wal-Mart is obviously interested in the Russian market and will enter it soon. They have ambitious plans regarding Russia," Khasis told reporters on the sidelines of an economic forum.

Wal-Mart, which has an office in Moscow, last year joined a Russian retail lobby group, chaired by Khasis, after hiring an executive to head its efforts to explore business opportunities in Russia and neighbouring markets.

Global retailers, many of whom missed their chance to expand on Russia's once-buoyant retail market during the 10-year, oil-fuelled economic boom, are now taking steps to enter a sector which still has more growth potential than mature markets despite a downturn.

While the U.S. company has not announced a strategy for entering the Russia, its French peer Carrefour (CARR.PA) is about to open its first Russian store in Moscow. It will be followed by at least two more openings this year and the company is reportedly considering buying Moscow's top grocery chain, Seventh Continent (SCON.MM). [ID:nLF129179]

If Carrefour buys Seventh Continent, it will be the first major retail acquisition since the credit crunch hit local firms.

Analysts have said they believe the crisis paves the way for a faster consolidation of the fragmented sector and they expect X5 to lead the process.

Khasis said X5 is currently negotiating takeovers of several Russian peers, including Siberian chain Holiday, and is working on a merger in Ukraine, which could be financed by a share issue.

"We are talking about a big deal there," Khasis said.

He later told Reuters the merger was only a "theoretical option" under consideration.

Despite X5's ambitions to grow, Khasis said he saw Russian purchasing power continuing to decline.

"We see that purchasing power continues to decline... so far we are not observing any changes to this trend," Khasis said.

He said consumer demand had dramatically shifted towards lower-price goods as consumer sentiment was hit by falling disposable incomes, rising unemployment and wage arrears, which has been forcing cash-strapped Russians to shop more at budget chains. (Reporting by Anton Doroshev and Polina Devitt; writing by Melissa Akin and Maria Kiselyova; editing by Karen Foster)