A study by Alfa Bank has revealed that the collapse of Russia’s retail sector turned out to be worse than predicted and even worse than the plunge in consumer demand in China or the United States. According to experts interviewed by Nezavisimaya Gazeta, even after the restrictions are lifted, Russians won’t have time to compensate for the spring collapse and at the end of the year, Russia’s retail trade turnover will not return to the levels that had existed before the pandemic.
In April, Russia’s retail trade turnover decreased by 23.4% in annual terms, which turned out to be worse than earlier expert forecasts. According to the Alfa Bank report, the steep decline in Russian retail may be due to the low prevalence of online commerce.
Experts interviewed by Nezavisimaya Gazeta noted that this year, retail trade and consumer consumption will not be able to return to pre-pandemic levels. “We expect that at the end of 2020, retail trade turnover may be reduced by 10%-15%,” BCS Premier’s Anton Pokatovich said. In his opinion, pre-coronavirus levels might be reached in the second half or even at the end of 2021.
“Even after the lockdown is completely lifted, we 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 of income due to the transition to remote work in the best case, and in the worst case, with a full loss of income,” said Alim Bishenov, a member of the General Council of Business Russia.