Russia’s leading shopping malls have made back 85% of the ground they lost during the coronavirus (COVID-19) epidemic as of Week 36 of this year, according to the Watcom Shopping index.

Retail turnover in the capital’s largest malls collapsed following the imposition of a strict lockdown regime by the city government in May. Sales fell by 74.2% compared to the same week a year earlier at their nadir in the 16^th week of the year and remained down by about 60% for the next month and half.

Sales quickly started to recover after the lockdown restrictions were eased but failed to make back all the ground lost, remaining about 20% down on the previous year – which was already a poor year for retail – for the summer months. In the first week of September the index broke into the low teens and was down 14.5% at the end of the first week of September.

The story is similar in St Petersburg, where retail sales fell even harder, down 85% year on year in the first week of April, and remained down by at least 60% until the middle of June, although the recovery was a bit steadier than in Moscow. And like in Moscow, by the end of the first week in September sales were down by 15.8% y/y.

While the retail sector has recovered a lot of its health, analysts are expecting the sector’s performance this year to remain below par.

 

In August, consumer spending patterns improved only slightly versus July (up 0.2% y/y versus down 0.7%). This was primarily due to spending on services, which fell 17.5% y/y following a 21.6% contraction in July, according to SberIndex.ru.

Food spending growth slowed to 5.6% from 7.2% in July. Non-food spending growth eased to 7.5% from 9.1% in July. Slowing growth in both food and non-food spending indicates that consumer demand likely remained weak in August following the relaxation of the lockdown, which boosted consumer activity in June and July.