Russia: Buying and Selling
Russia is Europe’s third largest consumer market by turnover, behind only Germany and France and the domestic food processing industry and developing food retail sector contribute significantly to Russia’s economy.
The Russian food and grocery retail market had total revenues of USD 252.4 billion in 2020, growing by 6.6% between 2016 and 2020. The value of the Russian food and groceries market grew by 8.4% in 2020 as a result of the Covid-19 pandemic, as consumers increased precautionary buying (MarketLine). Grocery retailers are expected to stagnate due to a declining population, rising prices, stagnating purchasing power and a high level of maturity. Convenience stores, discounters and food and drink e-commerce will continue to take share from hypermarkets, due to a change in shopping behaviour (Euromonitor). In addition to the challenges brought by the Covid-19 pandemic, the war in Ukraine exposed the retail sector to many difficuties including the destruction of logistics chains, the need to quickly find new suppliers, inflationary pressures and the decline in effective demand, but the food segment remains resilient (AKTOR).
According to the latest figures from USDA Foreign Agricultural Service, in 2019, the share of top ten largest retailers accounted for 38% of the food market. Nevertheless, there is strong competition as costs are high and profit margins are low. Russian consumers are increasingly buying food and drinks via the internet, especially in big cities, a trend that was accelerated by the pandemic. In 2021, the sector reached 329 billion RUB in turnover (Statista).
Well-organized distribution channels have developed significantly over the last few years, particularly in the major population centers of Moscow and St. Petersburg, and have started to expand to the regions. In the consumer sector, there are large-scale retail stores in Moscow that are able to buy in bulk. Shopping malls and big box stores are common sights in St. Petersburg, Moscow, and many other Russian cities. By employing the domestic distribution organizations, the task of bringing goods to market in Russia has been greatly eased.
The Russian market can be segmented as follows :
• X5 Retail Group : $21.25 billion in revenues (12.7% food market share in 2021)
• Magnit (9.5% food market shares in 2021)
• Mercury Retail (5.9% food market shares in 2021)
• Tander: $18.78 billion in revenues
• Auchan: $ 6.41 billion in revenues
• Lenta: $6.2 billion in revenues
• Dixy: $4.65 billion in revenues
• Metro Cash & Carry: $ 3.60 billion in revenues
• O’KEY: $ 2.87 billion in revenues
Any Comment About This Content? Report It to Us.
© eexpand, All Rights Reserved.
Latest Update: July 2024