Retail turnover in Russia will fall by up to 9% this year, a leading Russian lobby group said on Tuesday, as the sector grapples with logistics problems, supply chain problems and a decrease in consumer purchasing power.
Many Western companies have shunned Russia since it sent troops to Ukraine on Feb. 24, creating supply chain headaches as high inflation fuels prices and depresses demand.
“Decrease in total retail turnover”
“For the year, we expect a decline in total retail turnover in the range of 8-9%,” Interfax said quoting Igor Karavaev, head of the Presidium of the Association of Businesses of retail.
“It’s no surprise… The challenges faced by the retail industry this year are unprecedented – the destruction of supply chains, the need to quickly find new suppliers, inflationary pressure, falling demand. The industry is feeling the impact of these factors simultaneously for the first time,” he said.
Karavaev said food retailers are likely to fare better and noted discount stores are growing in popularity as consumers look to save money.
Russian malls have been “turned off” and lost up to 30% of footfall due to the exit of many Western brands, a major property developer said on Monday.
Annual inflation in Russia accelerated to 16.70% on April 1, its highest level since March 2015 and from 15.66% a week earlier, the economy ministry said, as volatility of the ruble has driven prices higher amid unprecedented Western sanctions.