Russians defy grim economic data in Christmas spending spree

Russians defy grim economic data in Christmas spending spree
By Henry Kirby January 12, 2016

Russian shoppers threw caution to the wind this Christmas, taking to shopping malls in a seasonal shopping spree that saw a sharper seasonal boost for retailers than in 2014, despite a slew of economic data that would suggest otherwise.

Data from the Watcom Shopping Index, which uses people-counting devices to measure footfall in shopping malls, showed that the six-week period preceding Christmas saw footfall in Russian malls grow at a faster rate than in the same period of 2014, with growth from the 47th week of 2015 to the end of the calendar year up 20.6%. The same period in 2014 saw footfall grow by only 10.2%.

While the overall index for the Christmas period in 2015 was marginally lower than in 2014, the seasonal boost to shopping activity more closely resembled the 36.5% seasonal growth seen in 2013, before sanctions and low oil prices hammered the Russian economy.

The overall picture for 2015 was one of decline in footfall, with an average weekly decrease of 6% in the Watcom Index compared with the previous year. This represented a slightly worse annual decline than in 2014, when footfall on average saw a 5.5% decrease compared with 2013.

Taken in context of the overall year, the decline in footfall in 2015 was less severe than other economic data would have suggested. The January-November period saw 11 consecutive months of declines in retail sales, negative growth in real wages, double-digit inflation and a sharp decline in the issuance of consumer credit.

According to Watcom group president Roman Skorokhodov, 2015’s measured decrease in mall footfall could have been artificially worsened by several new shopping malls opening in the Moscow area in early 2015, therefore spreading the volume of shoppers over a greater area. However, Skorokhodov added that “poor economic performance” was also a contributing factor.