Page 74 - RusRPTJul23

time, in 1Q23, total growth of trading space of all retail chains, including small regional players, increased by 1.4%, or by 0.46mn sqm to 33.8mn sqm. All of the major retailers such as Magnit, X5 Group, and Mercury Retail Group have reported a notable slowdown in the pace of their trading space expansion. This was also true for Trading Service Group, hard discounter Svetofor and Mayak operator.
Retail sales figures for April remained strong. Sales rose by 7.4% y/y after a contraction of 5.1% y/y in March (consensus: 5.8% y/y). We estimate that this is consistent with growth in SA month-on-month terms of 0.5-1.0%, similar to the pace of recent months. (See Chart 2.) Food sales rose by 3.3% y/y and non-food sales by 11.7% y/y. The sharp fall in inflation and increase in households’ real incomes, with real wages rising by 2.7% y/y in March, has helped to support purchasing power and consumer spending.
The Russian Ministry of Economic Development is seeing a shift in the consumer demand structure toward the services and catering industries, Minister Maxim Reshetnikov told TASS.
"The stable situation on the labour market and the rise in the real income of the population since the fourth quarter of last year has had a positive effect on reviving consumer demand. Overall turnover [of retail trade, household services and public catering - TASS] showed an uptick of 7.4% against last year’s levels. Furthermore, we see growth from the levels of two years ago - 0.1%. At the same time, we notice a change in the demand structure. It is shifting to the side of services and catering," the minister said.
No significant risks exist for inflation rising above the stated forecast of 5.3% in 2023, Reshetnikov said earlier. The consumer demand growth is accompanied by an increase in both domestic and imported supplies, he noted.
74 RUSSIA Country Report July 2023 www.intellinews.com