Shopping activity in Russian malls looks set to continue its recovery into the second quarter of 2016, with weekly footfall data by consultancy Watcom showing year-on-year growth for the last nine weeks.
Following a shaky start to the year – three of the first four weeks in 2016 saw annual decreases in footfall – activity in Russian shopping malls appears to have turned the corner, with the positive data of February continuing into March, as the first bneChart shows.
Russia’s failed programme of import substitutions, combined with a heavily weakened ruble, meant that prices of goods – especially the imported brands sold in shopping malls – rocketed throughout 2015.
As a result, Russians appeared less willing to spend in malls in 2015 compared with the two previous years, as the second bneChart shows. However, following a poor January, 2016’s activity has hovered around the levels of 2013 and 2014, with March data outperformed only by that of 2014.
According to Watcom group president Roman Skorokhodov, prices are now only just beginning to subside, with the stabilising retail sector no longer having to pass higher costs onto customers.
A sharp slowdown in inflation and in real wage decreases will also have contributed significantly to Russians’ increased spending. As the third bneChart shows, the sharp drop in retail sales throughout 2015 appears to have bottomed, with the 7.3% and 5.9% annual decreases of January and February, respectively, representing a huge improvement on the double-digit declines of the final months of last year.