Russian retail is slipping into a state close to stagnation. Sharp slowdown in business confidence index (BCI) bears evidence of it. BCI has dropped to +3% for the first time in 4.5 years of surveys. Some experts believe that we are witnessing major changes in the driving forces of the Russian economy. Its “artificial engines”, such as retail and financial sector, can’t stimulate the growth anymore.
In concerns of consumers’ demand, it stoped its growth in the last quarter of 2013 and that’s why there can be seen the shift of households from the spending model to the saving one. The situation has worsened by potential consumers’ high debt burden: arrear of Russian credit users by the end of 2013 is about 25% of their aggregate income. As consuming power decreased, retailers’ basic financial rates continued to drop. Experts are also predicting further economic downturn in the beginning of 2014.
Against the background of this economic downturn employment rate remained almost the same.
By statistics trading companies’ revenues in the end of 2013 have shown one of the worst results in past 4 years. In first quarter of 2014 about 20% of entrepreneurs are expecting a revenues decline.
Georgy Ostapkovich, the expert of the Center of conjuncture research, says this negative tendency of market condition cannot be overcome in short run.