Russians flock to shopping malls as weak ruble rules out holidays abroad

Russians flock to shopping malls as weak ruble rules out holidays abroad
Saving on the cost of trips abroad may have left many Russians with cash to burn at a time when they would usually find themselves vacationing in European destinations.
By Henry Kirby in London March 9, 2016

Footfall in Russian shopping malls hit a four-year seasonal high in the first week of February, according to consultancy Watcom, reflecting a wider trend of increased shopping activity among Russians in 2016.

Watcom's Shopping Index, which uses people-counting devices to measure footfall in Russian shopping malls, showed that week six of 2016 marked the highest level in the index for the same period across the last four years, hitting 541.5.

The spike in activity comes at a time when real wages and retail sales, while still in year-on-year decline, appear to have hit a bottom and are beginning to rebound. Retail sales, while down 7.3% year on year, marked the smallest decline in 11 months. Similarly, the 6.1% real wage decline in January was the smallest annual fall in over a year, with most of 2015 seeing double-digit declines.

According to Watcom group president Roman Skorokhodov, part of the reason Russians are parting with more cash may be that their options to spend abroad have been seriously hampered by the weak ruble. While Russians traditionally go on holiday in January, many this year had no choice to but to stay at home, where their money goes further.

Saving on the cost of trips abroad may have left many Russians with loose cash at a time when they would usually find themselves vacationing in European destinations, as well as Egyptian and Turkish resorts, now shut off due to terrorism or Moscow's stand-off with Ankara.

While 2016 data are still unavailable, figures from Russia's Ministry for Tourism show that Russian tourist trips abroad fell by 31% in the first nine months of 2015. Since then, the ruble steadily declined from around 65 to the dollar to a low of 82 in January – Russia's peak holiday season – before slowly rebounding to 72 at the time of writing.

Watcom's 2016 index data as a whole offer a promising outlook for the year to come, at least in annual terms. In 2015, the average weekly index score represented a 5.8% decline on the same period a year earlier. This year, the average score has marked a 1.2% increase on 2015. Bar three of the eight weeks measured in 2016, all have seen a growth in footfall in year-on-year terms.

Data

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