Page 40 - RusRPTJun19

4.5.3 Retail sector dynamics
Russian consumers remained under pressure in April, according to Rosstat’s monthly report published on May 24. Retail sales is the best indicator of consumer confidence and fell again slightly from the previous month, dropping to 1.2% y/y versus 1.6%), a trend seen for the last 5 consecutive months.
The volumes of retail turnover, remain decent with sales totalling RUB2,636bn in April, which is ahead of the RUB2,447bn in the same month a year earlier. However, retail sales are ticking over at more or less unchanged level, held back by the stagnation in real incomes.
The fall in retail sales is mirrored by the low level of consumer confidence measured by the Rosstat monthly consumer survey which is also running at -16 and in stark contrast to the business confidence survey which has improved dramatically in the last four months to -2%.
Services to the population were the only area that has shown improvement with growth at 0.6% y/y versus -0.3% in the previous month. The unemployment rate remained unchanged from March at a low of 4.7%.
The volume of retail sales grew by 2.6% y/y in 2018. The pace of growth varied during the year, however, slowing to 2.3% y/y in December. After several years of contraction, Rosstat reports that the volume of retail sales increased by roughly 5% in the time period of 2017–2018.
The volume of food sales rose by 1.7% last year. The volume of retail sales increased despite lower household disposable incomes. This may be partly explained by the rise in sales of inexpensive goods as well as a distinct increase in household borrowing. The stock of household borrowing increased by 22% last year. However, most of the increased borrowing came from housing loans.
Online retail continues to boom. The share in online retail sales has already reached 4.5% of total retail sales and it is expected to double again in the coming years.
40 RUSSIA Country Report June 2019 www.intellinews.com