Consumer demand in the first seven months of 2020 in Russia decreased due to the coronavirus pandemic by an average of 6.7% relative to the result of January-July 2019; everyone has reduced spending by about 4,000 rubles, and only in eight regions demand has shown growth, according to a study by RIA Novosti. Within the framework of the study, consumer demand was assessed as the sum of retail trade turnover, the volume of paid services to the population, and people's spending on cafes and restaurants.
According to experts, the economic turmoil of 2020 caused by the coronavirus pandemic, falling oil prices and the devaluation of the ruble had a fairly strong impact on consumer demand in Russia. This is partly due to a decrease in the income of the population and to some extent to the restriction of movement within the framework of the self-isolation regime, with a decrease in consumer confidence and the closure of retail chains and service providers during the quarantine period. As a result, all segments working with end users saw fewer customers and less money in their hands, although the situation was very uneven across different market sectors and industries.
The main blow to demand was in the second quarter, while in the first, on the contrary, there was a good growth. And although at the end of summer the dynamics of household expenditures improved, and in some parameters of consumer demand one can even speak of a recovery, in general, the decline still persists, although not as deep as was observed during the peak period of the pandemic crisis.
The study shows that the situation in the regional context in Russia was very different. This is due to the fact that quarantine measures in different regions were very variable in terms and types of economic restrictions. To assess the situation in this area, RIA Novosti experts calculated the dynamics of consumer demand in the regions of the Russian Federation. Based on these data, a rating of the regions of the Russian Federation was compiled according to the dynamics of consumer demand. The most significant reduction of demand is in 11 regions.
As the results of the research have shown, the dynamics of demand differed greatly among the leaders and the last regions. In particular, in eight regions in January-July, the demand of the population increased relative to the same period last year, in addition to this, two regions showed zero dynamics.
The Chukotka Autonomous Okrug stands out against the general background, where the growth of consumer demand was + 3.1%. This region, most likely, even acquired additional demand due to the self-isolation regime. Experts believe that in ordinary years the population of Chukotka in the summer massively left this harsh and remote region to other constituent entities of the Russian Federation, where people spent their money, and now the residents of Chukotka were forced to provide their leisure time at home, which predetermined the growth of local demand.
The second place is occupied by the Leningrad Region, where in the first seven months of this year the demand growth was at the level of + 2.0%. The explanation here can be found in different modes of self-isolation in the region and in St. Petersburg. In the second capital of Russia, shopping centers and many types of business were closed for a very long time (in fact, until the beginning of August), and many townspeople traveled to the region for goods and services. This version is confirmed by the fact that St. Petersburg showed one of the worst results (-9.7%) in terms of demand dynamics.
The third and fourth lines are occupied by the Tver and Ryazan regions, located next to Moscow. Experts believe that they played a role here, that a significant part of the region's residents who work in Moscow in the “remote” mode began to spend more time in their home region, and, accordingly, their expenses increased here. Also, additional consumer demand could have been brought in by Moscow citizens living outside of city, in dachas, in these regions or near their borders.
In addition to the above regions, consumer spending in January-July 2020 increased in the Chelyabinsk, Amur, Saratov and Tomsk regions, and in the Republic of Kalmykia and the Altai Territory remained at the level of the same period in 2019. As we can see, the geographical spread of the leaders is quite extensive, with a significant part of the regions located east of the Urals.
At the end of the rating.
The opposite situation, where demand fell the most, was observed in the Republic of North Ossetia – Alania. In this region, according to statistics, household spending decreased by 16.4%. In general, in 11 regions there is a drop in demand by more than 10%. Among the regions most affected in this respect, in addition to North Ossetia are the Republic of Sakha (Yakutia) (-15.1%), Primorsky Krai (-13.1%), the Republic of Dagestan (-12.2%), the Karachay-Cherkess Republic (-12.1%), Omsk region (-11.7%), Kabardino-Balkar Republic (-11.6%), Republic of Crimea (-11.3%), Stavropol Territory (-11.3%), Bryansk region (-11.1%) and Sverdlovsk region (-10%).
Also, the Magadan Region, which is adjacent to the Chukotka Autonomous Okrug and has a similar economic structure, has a rather low indicator. Perhaps the difference in the indicators of these regions is due to the lesser transport isolation of the Magadan region and a different degree of quarantine restrictions, experts say.
Also noteworthy is the strong decline in consumer demand in both capitals, which, among other things, is due to the large share of paid services in the consumer spending of citizens of Moscow and St. Petersburg. As we know, the decline in the turnover of paid services during the quarantine period was many times deeper than the decline in retail turnover.
Cost reduction by 4,000 rubles
In addition to changes in demand in percentage terms, RIA Rating experts analyzed the dynamics of average per capita monthly consumer spending, which show how much demand has changed in monetary terms. For clarity, the time range of April-July 2020 was selected, the period of the most acute phase of the pandemic.
As in the case of the percentage change in demand, the best situation was in the Chukotka Autonomous Okrug. This is the only region where population spending in April-July of this year turned out to be higher (by 1.1 thousand rubles) than in the same period in 2019.
Also, spending by the population decreased rather weakly in the Tver region, in the Republic of Kalmykia, in the Republic of Ingushetia and in the Altai Territory. In all these regions, the average per capita average monthly consumer spending fell within 500 rubles.
On average in the country, the monthly expenses of the population, according to RIA Novosti estimates, decreased by 4,000 rubles. At the same time, the median value is much lower – 2,600 rubles. This difference in the average result and in the median is due to the fact that in a number of large economically developed regions the decline in demand was much greater.
In particular, in Moscow, per capita average monthly consumer spending has decreased by almost 10 thousand rubles. This is largely due to the effect of the almost complete ban on foreign travel. Also among the leaders in reducing spending are such large regions: St. Petersburg, Moscow Region and Krasnodar Territory.
As we can see, this list includes regions with high incomes of the population, as well as with a large share of paid services and spending on public catering in the structure of consumer spending. In general, in nine regions, the average per capita spending by the population in the pandemic has decreased by more than 5,000 rubles per month.
According to RIA Novosti estimates, in the remainder of 2020, the dynamics of consumer demand will be negative compared to last year, but the rate of decline is likely to gradually decrease. At the same time, growth is possible in a number of regions by the end of 2020. Based on the results of seven months, there may be about ten such regions or even more. Experts believe that a full recovery in consumer demand will occur no earlier than 2022.