The collapse of the retail trade of the Russian Federation turned out to be worse than forecasts and the fall in consumer demand in a similar situation in China or the United States. This was indicated by specialists at Alfa Bank. They explained such a decline by the fact that Russia has a low penetration rate of online commerce. According to expert forecasts, after the restrictions are lifted, even if the pent-up demand is realized, the Russians will not have time to compensate for the spring collapse and, according to the results of the year, the retail trade turnover will not return to the values that were before the pandemic.
According to the results of April, retail trade turnover in the Russian Federation decreased by 23.4% in annual terms. Such data from Rosstat turned out to be worse than expert forecasts suggesting a fall in the range of 15-18%.
“In addition, this figure turned out to be worse than the decline in retail trade turnover in China in January-February (where the decline amounted to 20.5% in annual terms over the indicated period) and the April decrease in this indicator in the USA (by 16.4% yoy )”, - specialists of the Center for Macroeconomic Analysis of Alfa Bank said in their review. As they explained, a deeper decline in Russian retail may be due to the low penetration of Internet commerce: in China, the Internet segment already accounts for more than 30% of the total retail turnover, while in Russia it is 4.5%. In May, according to the forecast of the authors of the review, retail trade turnover in the Russian Federation will decrease by another 19% in annual terms.
According to the Center for Macroeconomic Analysis and Short-Range Forecasting, in March this year, retail turnover for the first time in about three years exceeded the average monthly value of pre-crisis 2012 - by 2% with seasonality removed. Now, most likely, a rollback has occurred, and the sector has again moved away from pre-crisis values.
Interviewed by Nezavisimaya Gazeta experts add that this year, apparently, retail trade and consumer consumption will not be able to return to levels preceding the pandemic.
“We expect that according to the results of 2020, retail trade turnover may be reduced by 10-15%,” said Anton Pokatovich, an economist at BCS Premier. In his opinion, a return to pre-coronavirus levels can be realized in the second half or even at the end of 2021.
“A surge in sales is expected in early summer, especially in the non-food segment. This will be deferred demand. But it compensates for no more than half of the April fall. The figures for May are likely to be negative as well, so smooth sales growth from July to November may still not bring the turnover to a plus on average for the year, says Valery Emelyanov, an analyst with Freedom Finance. “The Russians physically will not be able to consume so much of everything in their normal shopping regime so that this will offset the spring failure”.
“Even after the restriction regime is completely lifted, one should not expect a sharp increase in retail turnover, since the purchasing power of Russians is now extremely low, which is associated with a significant loss in income due to the transition to a remote mode of operation in the best case, and in the worst case, with a full loss of sources of income,” said Alim Bishenov, a member of the General Council of Business Russia.
The efforts of citizens will be aimed at supporting the current lifestyle - primarily through the use of cheaper substitute products and refusal to make large purchases, Pokatovich added. And such changes in consumer behavior can be long-term.