BMI View: The recovery in Russia's consumer outlook continues. Retail sales are growing once more as an improving economic outlook filters down. While we note that consumer confidence is improving and this is translating into sales for retailers, the country's consumer recovery will be steady but slow. We are not currently projecting a new round of sanctions emanating from the US to de-rail the recovery in the Russian consumer outlook, but we highlight it as a downside risk.
Retail sales in Russia recorded a 1.2% y-o-y increase in June 2017 (latest available data), marking three consecutive months of recovery after sales emerged from 27 consecutive months of decline. Continued improvements in consumer confidence readings indicate that this recovery in retail sales is set to continue.
In June 2016, consumer confidence reached -14 marking an improvement y-o-y on the -26 recorded in June 2016 and reaching a level of confidence for Russian consumers last seen in September 2014.