New Report Available: Russia Retail Report Q2 2016

The Russian economy shrunk by a sharp 3.7% during 2015, in part due to continued low oil prices and the hit from Western sanctions. Together with high levels of inflation, which reached 12.9% last year, we expect the retail sector to struggle. Russia has already seen its investment levels stall while the risk profile has deteriorated and we believe this will act to suppress growth throughout all the retail sectors until at least 2017 .

Key Views & Developments

We expect household consumption to begin to improve following a sharp decline between 2013-2015. Growth will be slow, however, owing to a weakened economy and high levels of inflation. We do not expect USD household spending to return to the levels achieved during 2013.

Full Report Details at
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We note that a considerable share of groceries and non-food product consumption have managed to remain buoyant by households exchanging and using their foreign currency reserves (keeping some US dollar savings has been widespread among Russian households since the breakup of the Soviet Union), however, they are dissipating at an alarming rate.

Despite the weak economic backdrop, many Russians will manage to keep their jobs throughout 2016 - with the unemployment rate is set to average 5.8% during 2016, down from 6.2% the previous year. In anticipation of this steady recovery, employers have been hesitant to make massive layoffs and this has helped protect household spending from further shocks.

Owing to these weakened economic conditions, we believe that Russian consumers will continue to readjust and refocus their spending on essential items and reduce levels of discretionary spending. Household spending will consequently consume 52.2% of GDP with food & drink, transport, housing & utilities and clothing & footwear comprising the largest expenditures.

The Russia Retail Report has been researched at source and features BMI Research's independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.

BMI's Russia Retail Report also examines the level of development and potential for growth of the retail sector, the commercial initiatives of major players, changing consumer demographics that influence demand and the regulatory environment. Key sub-sectors include mass grocery retail, autos, over-the-counter pharmaceuticals, computers and consumer electronics.

Key Benefits
Benchmark BMI's independent retail industry forecasts for Russia to test other views - a key input for successful budgeting and strategic business planning in the Russian retail market.
Target business opportunities and risks in Russia through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.

Coverage

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