The Russian Retail Report examines the long-term potential of the local consumer market, but flags shortterm
concerns about the impact on Russia’s economic outlook of falling external demand, increasing
financing constraints and growing political uncertainty.
The report examines how best to maximise returns in the Russian retail market while minimising
investment risk, and also explores the impact of major fiscal restraint in the West and the prospect of a
hard landing for the Chinese economy to the East on the Russian consumer and on the ability of
producers and exporters to realise returns in the short term.
The report also analyses the growth and risk management strategies being employed by the leading
players in the Russian retail sector, as they seek to maximise the growth opportunities offered by the local
market.
Russian per capita consumer spending is forecast to increase by 77% to 2016, compared with a regional
growth average of 59%. The country comes third in BMI’s Central and Eastern Europe (CEE) Retail
Risk/Reward Ratings, although it underperforms significantly for Risk.
Among all retail categories, mass grocery retail (MGR) will be the outperformer through to 2016 in
growth terms, with sales forecast to grow much faster than overall food sales throughout the forecast
period, by more than 210% to US$276.24bn by 2016. This would take MGR’s share of the overall food
market from 36.3% in 2012 to 67.2% by the end of the forecast period.
In the competitive arena, BMI sees upside potential in the fact that the Russian government has
committed to spending billions on infrastructure over the next 10 years, particularly railroads and
highways, which should translate to better logistics for expanding retailers.
Over the last quarter, BMI has revised the following forecasts/views:
• BMI remains below consensus in its real GDP growth forecast for 2012, projecting economic
growth of 3.2% in 2012, well below the 3.7% average Bloomberg consensus forecast, which in
our view overstates the outlook for fixed investment and household consumption this year.
Although we forecast 3.5% growth in 2013, we caution that risks are to the downside, as more
fiscal austerity, social unrest and the risk of major capital shortfalls in Europe''s banking sectors
could lead to an outright credit freeze over the next 12 to 18 months.
• Having surprised to the upside in 2011, with 6.4% real growth, BMI sees final household
consumption growing by 4.3% in 2012, aided by the combination of ongoing disinflation in
H112, low unemployment and relatively low household leverage. With the government looking
to stabilise its position in power over the course of 2012, this could see further subsidies and
demand-supporting government measures put in place over the course of the year. We therefore
see private consumption growth climbing moderately to 4.5% in 2013.
• BMI sees final household consumption growing by 4.3% in 2012, aided by the combination of
ongoing disinflation in H112, low unemployment and relatively low household leverage.
Russia Retail Report Q3 2012
Published: June 2012 No. of Pages: 85 Price: US $ 1175
Table of Contents
concerns about the impact on Russia’s economic outlook of falling external demand, increasing
financing constraints and growing political uncertainty.
The report examines how best to maximise returns in the Russian retail market while minimising
investment risk, and also explores the impact of major fiscal restraint in the West and the prospect of a
hard landing for the Chinese economy to the East on the Russian consumer and on the ability of
producers and exporters to realise returns in the short term.
The report also analyses the growth and risk management strategies being employed by the leading
players in the Russian retail sector, as they seek to maximise the growth opportunities offered by the local
market.
Russian per capita consumer spending is forecast to increase by 77% to 2016, compared with a regional
growth average of 59%. The country comes third in BMI’s Central and Eastern Europe (CEE) Retail
Risk/Reward Ratings, although it underperforms significantly for Risk.
Among all retail categories, mass grocery retail (MGR) will be the outperformer through to 2016 in
growth terms, with sales forecast to grow much faster than overall food sales throughout the forecast
period, by more than 210% to US$276.24bn by 2016. This would take MGR’s share of the overall food
market from 36.3% in 2012 to 67.2% by the end of the forecast period.
In the competitive arena, BMI sees upside potential in the fact that the Russian government has
committed to spending billions on infrastructure over the next 10 years, particularly railroads and
highways, which should translate to better logistics for expanding retailers.
Over the last quarter, BMI has revised the following forecasts/views:
• BMI remains below consensus in its real GDP growth forecast for 2012, projecting economic
growth of 3.2% in 2012, well below the 3.7% average Bloomberg consensus forecast, which in
our view overstates the outlook for fixed investment and household consumption this year.
Although we forecast 3.5% growth in 2013, we caution that risks are to the downside, as more
fiscal austerity, social unrest and the risk of major capital shortfalls in Europe''s banking sectors
could lead to an outright credit freeze over the next 12 to 18 months.
• Having surprised to the upside in 2011, with 6.4% real growth, BMI sees final household
consumption growing by 4.3% in 2012, aided by the combination of ongoing disinflation in
H112, low unemployment and relatively low household leverage. With the government looking
to stabilise its position in power over the course of 2012, this could see further subsidies and
demand-supporting government measures put in place over the course of the year. We therefore
see private consumption growth climbing moderately to 4.5% in 2013.
• BMI sees final household consumption growing by 4.3% in 2012, aided by the combination of
ongoing disinflation in H112, low unemployment and relatively low household leverage.
Russia Retail Report Q3 2012
Published: June 2012 No. of Pages: 85 Price: US $ 1175
Table of Contents
Executive Summary . 5
SWOT Analysis 7
Russia Retail Business Environment SWOT 7
Russia Political SWOT 8
Russia Economic SWOT .. 8
Market Overview .. 9
Current Trends .. 10
Key Players ... 12
Industry Forecast Scenario .. 17
Consumer Outlook 17
Retail Growth Outlook .. 19
Table: Russia’s Retail Sales Indicators, 2009-2016 .. 19
Table: Retail Sales Breakdown By Key Segment, 2012f 22
Macroeconomic Outlook ... 23
Table: Russia - Economic Activity, 2011-2016 . 26
Regional Retail Outlook 27
Central And Eastern Europe Retail Outlook . 27
Table: Central And Eastern Europe Retail Trends, 2008-2016. 27
Table: Regional Retail Sales, 2009-2016 (US$bn) 28
Table: Central And Eastern Europe Retail Sales By % Share, 2009-2016 29
Regional Retail Trends.. 29
Risk/Reward Ratings . 37
Table: Central And Eastern Europe Retail Risk/Reward Ratings . 37
Russia’s Retail Rating ... 38
Limits To Potential Returns .. 38
Risks To Realisation Of Returns 39
Mass Grocery Retail .. 40
Russia Mass Grocery Retail SWOT ... 40
Market Overview ... 41
Table: Russia’s Top 10 Mass Grocery Retailers ... 41
Leading Retailers .. 43
Table: Structure Of The Mass Retail Grocery Market By Number Of Outlets, 2003-2011 ... 45
Table: Structure Of The Mass Retail Grocery Market By Value, 2003-2011 46
Table: Average Sales Value Per Retail Outlet, 2011e ... 46
Industry Forecast Scenario ... 47
Table: Mass Grocery Retail – Value Sales by Format, 2009-2016 ... 48
Table: Sales Breakdown by Retail Format Type ... 48
Industry Developments .. 48
Consumer Electronics... 51
Russia Consumer Electronics Market SWOT 51
Market Overview ... 52
Computers . 52
Table: PC Sales, 2009-2016 . 52
AV . 55
Table: AV Sales, 2009-2016 .. 55
Mobile Handsets ... 59
Table: Mobile Communications, 2009-2016 . 59
Industry Forecast Scenario ... 64
Consumer Electronics Market ... 64
Table: Consumer Electronics Overview, 2009-2016 . 65
Industry Developments .. 67
Automotives ... 71
Russia Autos Industry SWOT 71
Market Overview ... 72
Industry Forecast Scenario ... 74
Domestic Sales .. 74
Table: Russia Autos Sales, 2010-2016 .. 74
Rural-Urban Divergence .. 75
Production 76
Table: Russia Autos Production, 2010-2016 . 76
Industry Developments .. 77
Demographic Outlook ... 79
Table: Russia''s Population By Age Group, 1990-2020 (''000) ... 80
Table: Russia''s Population By Age Group, 1990-2020 (% of total) .. 81
Table: Russia''s Key Population Ratios, 1990-2020 .. 82
Table: Russia''s Rural And Urban Population, 1990-2020 82
BMI Methodology ... 83
How We Generate Our Industry Forecasts ... 83
Sources.. 84Table: Russia''s Retail Sales Indicators, 2009-2016 . 19
Table: Retail Sales Breakdown By Key Segment, 2012f . 22
Table: Russia - Economic Activity, 2011-2016 . 26
Table: Central And Eastern Europe Retail Trends, 2008-2016. 27
Table: Regional Retail Sales, 2009-2016 (US$bn) . 28
Table: Central And Eastern Europe Retail Sales By % Share, 2009-2016 . 29
Table: Central And Eastern Europe Retail Risk/Reward Ratings . 37
Table: Russia''s Top 10 Mass Grocery Retailers . 41
Table: Structure Of The Mass Retail Grocery Market By Number Of Outlets, 2003-2011 . 45
Table: Structure Of The Mass Retail Grocery Market By Value, 2003-2011 . 46
Table: Average Sales Value Per Retail Outlet, 2011e . 46
Table: Mass Grocery Retail – Value Sales by Format, 2009-2016 . 48
Table: Sales Breakdown by Retail Format Type . 48
Table: PC Sales, 2009-2016 . 52
Table: AV Sales, 2009-2016 . 55
Table: Mobile Communications, 2009-2016 . 59
Table: Consumer Electronics Overview, 2009-2016 . 65
Table: Russia Autos Sales, 2010-2016 . 74
Table: Russia Autos Production, 2010-2016 . 76
Table: Russia''s Population By Age Group, 1990-2020 (''000) . 80
Table: Russia''s Population By Age Group, 1990-2020 (% of total) . 81
Table: Russia''s Key Population Ratios, 1990-2020 . 82
Table: Russia''s Rural And Urban Population, 1990-2020 . 82
SWOT Analysis 7
Russia Retail Business Environment SWOT 7
Russia Political SWOT 8
Russia Economic SWOT .. 8
Market Overview .. 9
Current Trends .. 10
Key Players ... 12
Industry Forecast Scenario .. 17
Consumer Outlook 17
Retail Growth Outlook .. 19
Table: Russia’s Retail Sales Indicators, 2009-2016 .. 19
Table: Retail Sales Breakdown By Key Segment, 2012f 22
Macroeconomic Outlook ... 23
Table: Russia - Economic Activity, 2011-2016 . 26
Regional Retail Outlook 27
Central And Eastern Europe Retail Outlook . 27
Table: Central And Eastern Europe Retail Trends, 2008-2016. 27
Table: Regional Retail Sales, 2009-2016 (US$bn) 28
Table: Central And Eastern Europe Retail Sales By % Share, 2009-2016 29
Regional Retail Trends.. 29
Risk/Reward Ratings . 37
Table: Central And Eastern Europe Retail Risk/Reward Ratings . 37
Russia’s Retail Rating ... 38
Limits To Potential Returns .. 38
Risks To Realisation Of Returns 39
Mass Grocery Retail .. 40
Russia Mass Grocery Retail SWOT ... 40
Market Overview ... 41
Table: Russia’s Top 10 Mass Grocery Retailers ... 41
Leading Retailers .. 43
Table: Structure Of The Mass Retail Grocery Market By Number Of Outlets, 2003-2011 ... 45
Table: Structure Of The Mass Retail Grocery Market By Value, 2003-2011 46
Table: Average Sales Value Per Retail Outlet, 2011e ... 46
Industry Forecast Scenario ... 47
Table: Mass Grocery Retail – Value Sales by Format, 2009-2016 ... 48
Table: Sales Breakdown by Retail Format Type ... 48
Industry Developments .. 48
Consumer Electronics... 51
Russia Consumer Electronics Market SWOT 51
Market Overview ... 52
Computers . 52
Table: PC Sales, 2009-2016 . 52
AV . 55
Table: AV Sales, 2009-2016 .. 55
Mobile Handsets ... 59
Table: Mobile Communications, 2009-2016 . 59
Industry Forecast Scenario ... 64
Consumer Electronics Market ... 64
Table: Consumer Electronics Overview, 2009-2016 . 65
Industry Developments .. 67
Automotives ... 71
Russia Autos Industry SWOT 71
Market Overview ... 72
Industry Forecast Scenario ... 74
Domestic Sales .. 74
Table: Russia Autos Sales, 2010-2016 .. 74
Rural-Urban Divergence .. 75
Production 76
Table: Russia Autos Production, 2010-2016 . 76
Industry Developments .. 77
Demographic Outlook ... 79
Table: Russia''s Population By Age Group, 1990-2020 (''000) ... 80
Table: Russia''s Population By Age Group, 1990-2020 (% of total) .. 81
Table: Russia''s Key Population Ratios, 1990-2020 .. 82
Table: Russia''s Rural And Urban Population, 1990-2020 82
BMI Methodology ... 83
How We Generate Our Industry Forecasts ... 83
Sources.. 84Table: Russia''s Retail Sales Indicators, 2009-2016 . 19
Table: Retail Sales Breakdown By Key Segment, 2012f . 22
Table: Russia - Economic Activity, 2011-2016 . 26
Table: Central And Eastern Europe Retail Trends, 2008-2016. 27
Table: Regional Retail Sales, 2009-2016 (US$bn) . 28
Table: Central And Eastern Europe Retail Sales By % Share, 2009-2016 . 29
Table: Central And Eastern Europe Retail Risk/Reward Ratings . 37
Table: Russia''s Top 10 Mass Grocery Retailers . 41
Table: Structure Of The Mass Retail Grocery Market By Number Of Outlets, 2003-2011 . 45
Table: Structure Of The Mass Retail Grocery Market By Value, 2003-2011 . 46
Table: Average Sales Value Per Retail Outlet, 2011e . 46
Table: Mass Grocery Retail – Value Sales by Format, 2009-2016 . 48
Table: Sales Breakdown by Retail Format Type . 48
Table: PC Sales, 2009-2016 . 52
Table: AV Sales, 2009-2016 . 55
Table: Mobile Communications, 2009-2016 . 59
Table: Consumer Electronics Overview, 2009-2016 . 65
Table: Russia Autos Sales, 2010-2016 . 74
Table: Russia Autos Production, 2010-2016 . 76
Table: Russia''s Population By Age Group, 1990-2020 (''000) . 80
Table: Russia''s Population By Age Group, 1990-2020 (% of total) . 81
Table: Russia''s Key Population Ratios, 1990-2020 . 82
Table: Russia''s Rural And Urban Population, 1990-2020 . 82
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