Page 61 - Russia OUTLOOK 2023

• Retail

Household spending on goods and services fell by 7% y/y in real terms in
the second and third quarters. Household purchasing power has been
reduced by the spike in inflation that followed immediately from Russia’s
invasion of Ukraine.

Consumption has notably been affected more than just the drop in real
household income, which deepened as late as in the third quarter and just to
3.4% y/y. As in previous recessions such as the covid recession of 2020, the
drop in consumption partly reflects a significant shift to increased saving in
households.

Goods purchases, which in normal years represent about 80% of household
spending, have plunged even more. Retail sales, which according to RosStat
account for nearly 95% of household spending on goods, have remained down
by 9-10% y/y since April.

Retail sales of food items, however, have only declined by a couple of percent.
In the main food sales categories, the clearest drops have been seen in fish
and dairy products, while sales of meat products have remained largely
unchanged. Sales of alcoholic spirits continued to rise and were up by over 7%
y/y in the first nine months of this year.

61 Russia OUTLOOK 2022 www.intellinews.com