Russia Retail Report Q1 2013
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 the risk of capital flight and overdependence on oil.
The report examines how best to maximise returns in the Russian retail market while minimising investment risk, and also explores the impact of the ongoing crisis in the country's main export market, Europe, 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 44% between 2013 and 2016, compared with a regional growth average of 33%. 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 almost 132% to US$231.46bn by 2016. This would take MGR's share of the overall food market from 42.1% in 2013 to 80.8% by 2016.
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's below-consensus forecast for Russia's 2012 real GDP growth of 3.4% appears to be well placed as leading indicators point towards a further slowdown in economic growth. We have revised down our forecast for 2013 real GDP growth in Russia to 3.4% from 3.6% previously. This comes on the heels of a stark shift by the central bank towards monetary policy tightening, a bias we expect to remain intact over the coming months.
? BMI's expectation for private consumption to weaken going into 2013 underpins our view for weaker headline growth. Private consumption has been a key driver of economic growth in Russia over the past two years. Falling unemployment and rising disposable incomes have seen household consumption growth average 7.0% year-on-year (y-o-y) in H112, up from 6.1% in the same period of 2011. However, going forward, tighter access to credit, via higher interest rates and the likelihood of more prudent lending practices by banks, will translate to weaker household consumption.
? Leading indicators suggest that these dynamics have already begun to feed through to weaker consumption – real retail trade slowed into H212, coming in at 4.4% y-o-y in August, down substantially from the 7.4 % racked up back in January. As a result of these combined dynamics, we forecast private consumption to increase by 4.2% in 2013, down from our forecast of 4.9% in 2012.
Table of contents
Chapter - Executive Summary
Chapter - SWOT Analysis
Russia Retail Business Environment SWOT
Russia Political SWOT
Russia Economic SWOT
Chapter - Market Overview
Chapter - Industry Forecast Scenario
Retail Growth Outlook
Table: Retail Sales Indicators, 2009-2016
Table: Retail Sales Breakdown By Key Segment, 2013f
Table: Economic Activity
Chapter - Regional Retail Outlook
Central And Eastern Europe Retail Outlook
Table: Central And Eastern Europe Retail Trends, 2009-2016
Table: Central And Eastern Europe Retail Sales, 2009-2016 (US$bn, unless stated)
Table: Central And Eastern Europe Retail Sales By % Share, 2009-2016
Regional Retail Trends
Chapter - Risk/Reward Ratings
Table: Regional Retail Business Environment Ratings
Russia's Retail Rating
Limits To Potential Returns
Risks To Realisation Of Returns
Chapter - Mass Grocery Retail
Russia Mass Grocery Retail SWOT
Table: Structure Of The Mass Retail Grocery Market By Number Of Outlets, 2003-2011
Table: Structure Of The Mass Retail Grocery Market By Value, 2003-2011
Table: Average Sales Value per Retail Outlet – 2011
Industry Forecast Scenario
Table: Mass Grocery Retail Sales, 2009-2016
Table: Sales Breakdown By Retail Format Type
Table: Trade Indicators, 2009-2016
Chapter - Consumer Electronics
Russia Consumer Electronics Market SWOT
Table: PC Sales, 2008-2016
Table: AV Sales, 2009-2016
Table: Mobile Communications, 2008-2016
Three Most Popular Models In Different Pricing Categories In MTS Retail Network Q311, % Of Total Units Sold
Industry Forecast Scenario
Consumer Electronics Market
Table: Consumer Electronics Overview, 2008-2016
Chapter - Automotives
Russia Autos Industry SWOT
Industry Forecast Scenario
Table: Autos Sales, 2010-2016
Table: Autos Production, 2010-2016
Table: Autos Trade, 2010-2016
Table: Passenger Car Segment, 2010-2016
Chapter - Demographic Outlook
Table: Russia's Population By Age Group, 1990-2020 ('000)
Table: Russia's Population By Age Group, 1990-2020 (% of total)
Table: Russia's Key Population Ratios, 1990-2020
Table: Russia's Rural And Urban Population, 1990-2020
Chapter - BMI Methodology
How We Generate Our Industry Forecasts
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