14 November 2025
Russians are tightening their belts and, despite officially rising incomes, are buying fewer and fewer goods. Experts say non-food stores in Russia are losing business. They see no path to recovery.
“We are seeing a sharp slowdown in non-food retail sales across the country: overall, it has been declining in real terms for seven quarters in a row, and in nominal terms for three quarters – if we exclude marketplaces,” said Mikhail Matovnikov, head of Sber’s Center for Financial Analysis, describing the “scale of the disaster.”
According to Rosstat , real disposable income increased by 9.2% over the first nine months of the year compared to the previous year, while wages increased by 3.8%. Retail turnover in real prices was only 2.1% higher.
Due to tight monetary policy, Russian retail is losing customers and turnover, but the slowdown in demand is uneven and affects non-food retail, said Matovnikov.
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The nominal decline outside of marketplaces in the third quarter was 7% year-on-year across Russia overall, but reached 25% in some regions, he shared Sber data. Grocery retail hasn’t seen a decline yet, and is slowing significantly, with real growth reaching several percent.
Weak demand is reflected in rising inventories. According to Rosstat, inventory levels increased significantly in September for virtually all types of non-food products, from clothing to furniture, with the exception of automobiles, whose sales jumped in anticipation of the recycling fee increase. For example, inventory levels for clothing rose to 69 days of retail sales by early October, up from 51 days a month earlier; footwear to 68 days from 54; mobile phones to 72 days from 55; refrigerators to 62 days from 56; and building materials to 60 days from 55.
In October, according to the OFD Platform, which processes electronic receipts, the number of purchases of electronics and clothing in Russia decreased by 15-17% compared to the same period in 2024.
Representatives of non-food retailers and independent experts confirm a noticeable decline in demand, and that clothing retailers are particularly struggling. “While electronics and furniture saw a surge in demand in late spring and early summer, and car sales picked up in September, the situation for clothing retailers has only gotten worse since last year,” says a commercial real estate consultant. “Not only are Russians inclined to cut back on spending, but the weather is also conducive to this—last winter was warm and the summer was cool, meaning new collections were sold out by at least half,” he explains.
As a result, almost all clothing chains are cutting back on their stores, and some are abandoning brick-and-mortar retail altogether, says a consultant. “Before this season, they didn’t even properly advertise new collections. Campaigns were launched by the most successful or optimistic ones, while the rest cut back on everything they could and went into survival mode,” says the owner of a production company working with fashion brands. “We’ve been patient for a long time, but profitability has been consistently negative this year, so we’re closing all stores by the end of the year and relying on marketplaces and our own online store,” says a top manager of a Russian teen clothing brand that has been developing its own retail chain for over 15 years.
Demand for electronics in Russia fell by an average of 10-15% in rubles, not adjusted for inflation, over the course of the year, and the fourth quarter, traditionally the best-selling quarter of the year, is unlikely to reverse this trend, according to Oleg Fomenko, CEO of Merlion, one of the country’s largest electronics and home appliance distributors (which also owns the Citylink chain of stores): “The fat years of endless growth in the electronics market… are over. The market has changed, following the consumer. I don’t think we should expect growth in electronics next year.” This will be further impacted by price increases due to the introduction of a technology levy on imported equipment, which the authorities are preparing to implement, the businessman noted.
The proposed introduction of an industrial tax of up to 5,000 rubles per unit of equipment could further impact demand. It will be levied on product categories with a low share of domestic producers, with Russian companies receiving tax exemptions. The tax will be passed on to prices.
Gazprombank analysts attributed weak demand for non-food products to consumers’ shift to savings behavior. “We’re competing with banks,” noted Dmitry Alekseev, founder of the DNS electronics chain.
Meanwhile, there’s virtually no slowdown in services and food service: these segments continue to grow at rates comparable to nominal wage growth, or 15-16% by 2024, said Matovnikov. “That is, demand has shifted from purchasing goods to acquiring experiences,” he concludes. Central Bank Chairwoman Elvira Nabiullina called the growth of the “experience economy” a long-term trend and one of the shifts in the Russian economy. People are saving, but they’re “eating and drinking,” explains Moscow State University professor Natalia Zubarevich, explaining the growth of food service.
Marketplaces are on the rise
For non-food retail, the situation is exacerbated by the fact that shoppers are not only spending less but are increasingly preferring marketplaces for this purpose. This is a long-term trend, according to Matovnikov, and therefore a recovery in the growth of non-food retail in stores is not expected. Marketplaces are increasing their turnover by approximately 1.5 times year-on-year, and, according to Sberbank, they account for about a third of total non-food retail turnover in Russia, and in some remote regions, they account for 70%.
Overall, according to Sberbank estimates, non-food chains have cut about 5% of their stores and about 10% of their staff over the past two years. “Marketplaces have devoured offline retail, and online retail has also been hit hard,” adds Matovnikov, explaining that well-known online stores have been experiencing the same difficulties as their offline counterparts in recent years.
Therefore, in the non-food retail sector, we should expect market consolidation, believes Matovnikov: only the strongest chain brands, which are already growing amid the overall decline, will survive.
However, he predicts that the service and experience economy will continue to grow rapidly. Yuri Mikhailichenko, President of the Russian Franchising Association, cited beauty salons, children’s educational and entertainment studios, cafes, and home improvement businesses as obvious growth areas.
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