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4.5.3 Retail sector dynamics
Head of Russia’s Retail Companies Association gives the results of retail sector. Sergey Belyakov, the Head of the Retail Companies Association (ACORT), has given an interview to Interfax. The key takeaways are as follows. The average ticket grew 5.4% y/y in April (RUB600) in the grocery segment, but corrected slightly m/m in May (-3.8%, RUB577), as customer demand stabilised. Traffic decreased 50% for food retail in the second half of April, while all non-food outlets were closed in April and May. The total retail market could decline up to 29% y/y for 2020, according to ACORT, with non-grocery losing RUB6.1tn. E-grocery grew rapidly, with March and April surging 3.5x and 7x vs. February, respectively. The share of promos remained elevated, at 50% of food sales, due to customers becoming even more price-conscious.
SberIndex, Sberbank's index of consumption activity, showed an 8% y/y decline over June 8-14, which is an improvement over the 10.8% drop over the previous week and 16.8% decline registered in May. An overall improvement versus the previous week was observed in all consumption segments.
Non-food spending showed growth for the first time since March (+1.9% y/y versus -1.3% the previous week). This was attributable to non-food stores reopening in large regions, such as Moscow. The expansion of e-commerce also likely contributed to the non-food upturn.
Food spending was up 8.7% in June 8-14 versus 7.8% in June 1-7 and 11.1% in May. Still, given the sample bias toward large food chains, analyst says they cannot draw any conclusions about the improvement in the SME segment.
Spending on services was down 35.3% versus 37.6% y/y over June 1-7 and 47.6% in May.
Russia’s retail turnover is coming back to life as the lockdowns on its biggest cities are eased.
The latest Watcom shopping index results, that measures foot traffic in Russia’s biggest malls in real time using 3D camera technology, shows that foot traffic in Moscow has picked up dramatically in the middle fo June..
Moscow mayor Sergey Sobyanin imposed some of the toughest stay-at-home restrictions in Europe on March 30 after finally admitting the infections from the virus were running unchecked in the capital – the epicentre of Russia’s epidemic.
Residents were confined to their apartments and only allowed out to buy foods (from a store within 100m of their residences), walk the dog or carry out the rubbish. A system of QR codes was introduced to police the measures and transgressors faced heavy fines.
However, the infection rate in Moscow has passed peak and Sobyanin relaxed the regime at the start of last week. Foot traffic in the malls immediately picked up.
52 RUSSIA Country Report July 2020 www.intellinews.com
