Page 83 - RusRPTApr23

Food and non-food sales rose by an estimated 0.5-1.0% month-on-month in seasonally adjusted terms.
“This follows sharp increases in sales in January and suggests that consumer-facing sectors have turned a corner. That said, households remain very cautious about spending, evidenced by surveys showing a growing share of consumers intending to save,” said Liam Peach, an emerging market economist with Capital Economics in a note.
In January Russia’s retail trade, the rate of decline was the smallest since the beginning of the special military operation in Ukraine (SVO) and amounted to 6.6%. At the same time, the volume of paid services to the population and the turnover of public catering show a positive trend. The total result of retail trade, the sector of paid services and public catering in January 2023, according to the Ministry of Economic Development (MED), was 3.7% less than a year earlier. Recall that in December last year, the decline was 7.2%. The improvement in consumer demand dynamics is due to a number of factors - record low unemployment, growth in real wages at the end of 2022, as well as pent-up demand in the form of an increase in household savings recorded last year.
Household appliances, ordered on a wave of excitement a year ago, have only now reached Russia and are piling up in warehouses. Household appliances, ordered last spring on fears that China would also stop deliveries, have reached Russia only now due to problems with logistics, Kommersant writes. In the warehouses of distributors and manufacturers of household appliances, large stocks of products have formed, most of them are held by brands that focus on production in China. The delivery time has increased dramatically due to the refusal of the main container lines (including the largest Maersk) to work with Russia. Because of this, the parties ordered in the summer reached the recipients only on New Year's Eve. But the main reason for overstocking is not at all the influx of products, but the drop in demand. Last year, demand decreased by 30% in physical terms (in monetary terms, sales increased by 6%, to RUB445bn, Holodilnik.ru estimate), this year, various participants expect a decline by another 10–30%. A month ago, a similar picture for similar reasons developed in the laptop market - more than 1mn units were unsold in the warehouses of distributors. In this case, the situation is even worse - there are many exotic brands for the Russian market, often purchased without pre-sale preparation and Russification. The situation with household appliances is another clear sign of a drop in the income of Russians. But they should not expect discounts on stale goods - rather, they can expect that the prices for goods from new batches will become lower for large distributors, less than others who have succumbed to panic.
83 RUSSIA Country Report Russia April 2023 www.intellinews.com