Page 103 - RusRPTJun20

Social distancing measures are driving a material acceleration of the long-awaited development of the express delivery ​(ED, i.e. on demand delivery) sector, which will create a new layer of a city social infrastructure in the near future. Once a city is covered by dark stores (key locations for ED businesses), they can be successfully used to deliver any type of product and address any frequency level. Yet, the ED business can only be scaled in big cities (1mn+ in the context of Russia) that have the following features in place: a high density of living, time value of customers and high household budgets. This is not a single country-wide service – not even in developed markets – and, in the best case, companies can establish positions in a few big cities. In Russia, ED was pioneered by Samokat and later followed by Yandex.Lavka. Both operate in Moscow and St Petersburg and are using their timely momentum to address changing customer needs.
New limits on the sale of alcohol in bars, cafes and restaurants located in residential buildings came into effect as of 5 May​. They forbid trading from outlets that have a sales area of less than 20sqm. Regions have been given additional rights, such as increasing the minimum required size of the sales area or forbidding the sale of alcohol completely. Anadolu Efes has 60% of its volumes coming from Russia, making it the market leader with a 28% share. At the moment, the on-trade channel, which accounts for some 5% of total sales in Russia, is closed but that is offset by the slightly higher sales in modern retail. In Turkey (14% of the company's volumes), ontrade accounts for 25% and there is no offset. We expect a good start to the year in 1Q20, with the company due to report its results today. However, in subsequent months we anticipate a slowdown, implying moderate downside risks to our forecasts, mainly due to falling Turkish volumes.
103​ RUSSIA Country Report​ June 2020 ​ ​www.intellinews.com