Boston, MA -- (ReleaseWire) -- 07/24/2014 -- Russia's retail market is an extremely attractive investment prospect, with an increasingly affluent population leading to projected household spending growth of 6.7% over 2014-2018. International chains in particular are eager to cash in on Russia's increasing purchasing power, with 17 international brands having already announced plans to enter Moscow's retail market by the end of 2014. However, economic growth continues to be below the global average, with some area s, such as the beer sub-sector, set to decline over the coming years.
The attraction of Russia's retail market to potential investors centres on the continuing rise in disposable incomes, the growing desire for a wider choice of products and price points, easier access to credit and an increase in car ownership. Recent or upcoming EU membership and significant foreign direct investment should also lead to an expansion of retail markets.
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The success story is set to continue over the coming years, with the percentage of households falling into the middle-income wage bracket of USD10,000+ to exceed 90% by 2018. This will lead to a pronounced increase in aspirational purchasing, with clothing and footwear, household goods and personal care and effects all set to see average growth of 6.2%, 6.4% and 5.5% over the 2014-2018 forecast period.
However, the sector is not without its problems. Despite Russia having one of the largest and most promising e-commerce markets in the world, strict customs laws are hindering online sales, particularly for Western retailers such as Amazon and Net-A-Porter. Although just 2% of Russia's retail sales are conducted online, the country's e-commerce market is cited as being fast-growing, with this figure expected to rise to 5% by 2015, according to Morgan Stanley.
Russia's beer sector is also in trouble, due to a ban on advertising and stores only being allowed to sell alcohol until 11pm, in a bid to curb consumption. The sector was on course to shrink by...
The Russia Retail Report has been researched at source and features Business Monitor International (BMI)'s independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.
BMI's Russia Retail Report also examines the level of development and potential for growth of the retail sector, the commercial initiatives of major players, changing consumer demographics that influence demand and the regulatory environment. Key sub-sectors include mass grocery retail, autos, over-the-counter pharmaceuticals, computers and consumer electronics.
- Benchmark BMI's independent retail industry forecasts for Russia to test other views - a key input for successful budgeting and strategic business planning in the Russian retail market.
- Target business opportunities and risks in Russia through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
BMI Industry View
Summary of BMI?s key forecasts and industry analysis, plus a discussion of major industry developments and a snapshot of key short-term demand-driving macroeconomic movements.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the retail sector and within the broader political, economic and business environment.
BMI Industry Forecasts
There are four separate 5-year forecast modules in the retail reports. These are:
Headline Retail Forecast: Total Household Spending, (US$bn and local currency, % growth, % GDP, per capita, per household); Spending by Retail Sector for: food and non-alcoholic drink, alcoholic drink, clothing and footwear, housing and utilities, furnishings and home, health, transport, recreation, education, transport, restaurants and hotels, personal care and insurance (US$bn and local currency, % growth, % GDP, % of total spending)
Retail Sector Forecast: Breakdown of Food, Non Alcoholic Drink, Alcohol, Tobacco, Clothing, Footwear, Household Goods, Furnishings, Appliances, Glass and Tableware, Household Textiles, Consumer Electronics, Garden Toys and Pets, Home and Garden tools, Personal Care, Personal Effects Spending (US$bn, % Growth);
Household Income and Numbers Forecast: Number of Households (?000,% growth); gross income per household and per capita; net income per household and per capita; tax and social contributions per capita; breakdown of household incomes ? US$5000+, US$10,000+ US$50000+ (?000, % of total); labour force, employment and unemployment (?000, % change)
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