Page 57 - RusRPTApr21

4.5.3 Retail sector dynamics
Retail sales, a proxy for household consumption, declined 1.3% y/y in February vs. a decline of 0.1% y/y in January. Retail sales were dragged down by the drop in non-food goods consumption (-1.4% y/y), while food consumption was down 1.1% y/y vs. pre-COVID-19 levels (-1% y/y in January).
Turnover for market services continued to improve as restrictions are lifted at the regional level (-6% y/y vs. -9.4% y/y in January and -17% y/y in 2020). On the income side, real wages showed almost zero growth in January (+0.1% y/y), similarly to October and November 2020 (+0.2% y/y and +0.5% y/y, respectively) after growing 4.6% y/y in December 2020.
The government decree spreads price control widely, as the groups of goods and services included in the control list account for about three- quarters of Russia's official average consumer price basket.
The checklist includes e.g. almost all food groups, alcohol, petrol and diesel, textiles and clothing as well as shoes, furniture, household chemical products, consumer electronics, building materials and a wide range of services in the fields of communications, passenger transport, housing, healthcare, education and culture. Price control is the main responsibility of the Ministry of Economic Affairs and the main support is Rosstat and the Competition Authority. The groups of goods and services to be monitored are divided into nine ministries and two government agencies.
An amendment to the law during the winter has lowered the regional price increase limit for products considered to be socially important, which may lead to state price control measures. For some foodstuffs and agricultural products, price increase agreements were concluded between producers, the trade sector and the state, and individual export quotas and tariffs were introduced, which are currently in force until the middle of this year. From the beginning of June, the measures will be complemented by a variable export duty on wheat to offset the difference between the export price and the domestic price.
The rise in consumer prices for food products (such as sugar and sunflower oil) that have been the subject of price-cutting measures has stalled in recent months. Overall, the seasonally adjusted rise in consumer food prices has slowed slightly this year. The acceleration in the rise towards the end of last year was mainly due to the rise in world market prices for agricultural products, the depreciation of the ruble and the poor harvest of some crops. The rise has still been fairly rapid. In February, food prices were 7.7% higher than a year earlier (8.4% excluding alcohol), including an annual increase of 16–17% in fruit and vegetable prices and 6.5% in other food prices. The share of
57 RUSSIA Country Report April 2021 www.intellinews.com