Back to school! Watcom shopping index improves after terrible 1H17

Back to school! Watcom shopping index improves after terrible 1H17
Despite recovering incomes 2017 has been a long cold summer of misery for retail. / bne IntelliNews
By bne IntelliNews September 18, 2017

Russia went back to school on September 1 and the Watcom Shopping index jumped to nearly 500 as families stocked up on pens and rulers (and more besides), breaking the long run of misery earlier in this year.

Despite recovering incomes 2017 has been a long cold summer of misery for retail. The index that measures footfall in the major shopping malls of Russia’s capital in real time using security cameras to count faces, has been running below all the levels for the last four years. The 2017 shopping season has been worst since the index was launched in 2014.

The index results for August (497) improved dramatically, overtaking the result for 2015 (474), but still lagging behind those of 2016 (501) and the best year in the series of 2014 (502). Still, the uptick, while welcome, was still below the long-term par.

In August, when all the shopping centers were expecting traffic growth due to the “back to school” season, the expected splash did not occur, because of continuing stagnation and increasing expenses. People continue to live in a “saving” mode, Watcom  reports.

Watcom’s owner Roman Skorokhodov says: “In the period of the autumn and winter collection launch, preparation for September 1 is a big day for Russians. However, people continued to demonstrate prudence despite the great effort by shopping centers and retail outlets that started their advertising campaigns early in July for the autumn season.”

Incomes have been recovering and all the main related indicators – nominal income, real and real disposable income – are all back in the black for the first time in several years. However, while retail turnover is also back in positive territory, it is only just positive. At best the situation can be described as the crisis is over, but the recovery in consumption is yet to get underway.

Managing company Stolitsa Management general director Olga Letuitina, representing small format shopping centers, commented: “Our shopping centers demonstrated 7% sales growth on average compared to August last year.

The commercial director of the Crocus Group, one of the very largest malls in Moscow, Olga Antonova, said: “According to the results of August 2017, footfall growth in the Vegas Kashirskoye shosse increased by 20% compared to August 2016.” She explains the better than average growth as the mall is a new one and is still building up its cliental. In the older (and very famous) Vegas Crocus City, footfall was down slightly by 3% y/y, Anonova added.

The marketing director of the equally famous Afimall City Marina Vaganova, which is located in the heart of the Moscow City complex, commented: “Traffic in Afimall City in August of 2017 grew by 5.8% LFL compared to the last year. There were several events to stimulate traffic: gifts could be obtained either through a mobile application or by presenting checks at the information desk. Also in the second half of August, there was a school products fair, at which non-standard school accessories were presented, quests and educational games for children were held.”

Moscow’s leading retailers have become a lot more proactive and competitive in their quest to attract customers and lay on entertainments and other incentives to persuade punters to visit their giant malls. 

Data

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