Page 12 - RusRPTJul20

previous investment plans, increased placements of state orders with local producers and intensification of steps aimed at raising the efficiency of public administration via an accelerated transfer to digital services.
Risks yes, but goals achievable:​ The primary risks to implementing NPER, according to the government, are a delayed spike in unemployment, a more significant decline in per capita real income and domestic demand, a reduction in corporate investment plans, and rising volumes of NPLs in the banking sector.
Analysts agree that such risks do exist as well as other challenges that include possible bureaucratic delays in implementation of the Plan and distribution of state funding, as well as the risk of global recession/stagnation. Analysts are cautiously optimistic that NPER can achieve its goals, providing the recovery in the global economy is not beset by a second COVID wave or continued escalation in trade/geopolitical tensions.
2.6 ​ ​Burger, pizza sales collapse due to coronacrisis
Of all the sectors that have been hurt by the coronacrisis, none have been hurt more than the consumer food services in April​. According to Rosstat’s latest numbers the turnover on consumer food services more than halved to RUB64.5bn ($945mn) year-on-year.
Fast food has grown increasingly popular in Russia and took off during the 2008 crisis when many of the international companies, such as Yum! (the owner of KFC) moved into the market.
Burgers have been in the front line in this crisis and seen sales drop by a third, while all categories of fast food sales are down.
Burgers: 36% y/y
Cafeterias and sushi: 29% y/y Bakeries: 18% y/y
Fast food segment revenues: 12% y/y Pizza segment revenues: 33% y/y
“The foodservice market was one of the sectors most affected by the pandemic lockdown, as all outlets have been closed since 28 March,” VTB Capital (VTBC) said in a note. “Only takeaway or delivery services are allowed. As ready-food delivery represented only 13% of the total market in 2019 (RUB170bn), most players are not able to compensate for the loss of offline revenues. On average, in May, total revenues were down 70% y/y, and only 38% of all restaurants were able to work in such format, according to Infoline.” Pizza delivery has also been wounded by the coronacrisis. The largest player on the market is Dodo Pizza with a 12% market share, which had to close 50 of its least efficient locations, or some 8% of the whole chain as of April, reports VTBC.
The second largest player, Domino's Russia (6% market share), reported sales declining 32% y/y and the temporary closure of 26 restaurants (13% of total), in order to optimise its workforce.
12​ RUSSIA Country Report​ July 2020 ​ ​www.intellinews.com