Russia Retail Report Q4 2012Published by: Business Monitor International Published: Sep. 19, 2012 - 90 Pages Table of Contents
AbstractThe Russian Retail Report examines the long-term potential of the local consumer market, but flags shorttermconcerns about the impact on Russia’s economic outlook of weakening external demand andcontinued uncertainty over the policy environment.The report examines how best to maximise returns in the Russian retail market while minimisinginvestment 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 theshort term. The report also analyses the growth and risk management strategies being employed by the leadingplayers in the Russian retail sector, as they seek to maximise the growth opportunities offered by the localmarket. Russian per capita consumer spending is forecast to increase by 55% to 2016, compared with a regionalgrowth average of 44%. The country comes third in BMI’s Central and Eastern Europe (CEE) RetailRisk/Reward Ratings, although it underperforms significantly for Risk. Among all retail categories, mass grocery retail (MGR) will be the outperformer through to 2016 ingrowth terms, with sales forecast to grow much faster than overall food sales throughout the forecastperiod, by more than 220% to US$275.18bn by 2016. This would take MGR’s share of the overall foodmarket 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 hascommitted to spending billions on infrastructure over the next 10 years, particularly railroads andhighways, which should translate to better logistics for expanding retailers. Over the last quarter, BMI has revised the following forecasts/views: Although strong government revenue flows are less assured in light of a recessionary outlook inEurope and weaker growth at home, BMI has adjusted upwards its real government expendituregrowth forecast for 2012, which sees our real GDP growth forecast for Russia this year risemoderately to 3.4% from 3.2% previously. BMI believes that weak external demand and a moderation in oil prices is likely to persist into2013, when we see growth edging only slightly higher to 3.5% on account of higher fixedinvestment and improvement in private consumption. Thereafter, we see scope for economicgrowth to accelerate again, peaking at 4.5% in 2014 and 2015, as the economy benefits fromhigher spending on infrastructure, especially ahead of the Sochi Winter Olympics in 2014 andthe FIFA World Cup in 2016. Despite a surge in real wage growth since the start of the year, BMI sees real privateconsumption growth slowing somewhat to 4.3% this year, from 6.4% in 2011. We expect higherinflation towards the second half of the year to see real wage growth moderate. Get full details about this report >> |
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