Russian retail suffers amid rising fears of terrorist attack on home soil

Russian retail suffers amid rising fears of terrorist attack on home soil
By Henry Kirby December 2, 2015

Footfall in Russian shopping malls fell a massive 10% in the third week of November compared with the same period in 2014, as fears of terrorist attacks on Russian soil combined with continuing economic difficulties for consumers took their toll.

Figures from the Watcom shopping index, which uses people-counting devices to measure shopping activity in malls, show a grim year for Russian retailers, with year-on-year weekly figures in negative territory throughout 2015.

Footfall in malls had been enjoying a sharp recovery toward positive territory from the beginning of October, but fell heavily the week following the November 13 terrorist attacks in Paris.

The Watcom index actually saw a week-on-week increase in its latest data, growing from 509.9 in the second week of November to 514.4 the following week. While the growth was positive, the rate of it fell far short of the seasonal boost that retail figures typically see in the run-up to Christmas, meaning the year-on-year figure was significantly down.

“Normally, November marks the beginning of the Christmas shopping season,” said Watcom’s group president, Roman Skorokhodov. “One of the factors that could have an impact on footfall could be a fear of terrorist attacks.” 

Prior to the Paris attacks, a Russian commercial airliner was shot down in Egypt, killing everyone on board. 219 of the 224 people on board were Russians.

While the decline in shopping activity and recent terrorist attacks is not definitively correlated, the decrease in footfall fits the overall sentiment of Russians, with a recent poll by research company VTsIOM showing that more Russians than ever are fearful of a terrorist attack.

According to Yulia Baskakov, head of socio-political research at VTsIOM, the terrorist attacks could have caused “a shock reaction and natural growth concerns”.