The economical model of behavior of Russian consumers is gradually coming to naught. However, sales of televisions, refrigerators, and other expensive long-term consumer goods remain low, RBC reports with reference to the bulletin of the Analytical Center, in which experts analyzed the situation with personal consumption of goods.
Russians change habits of personal consumption
The “protective model” of the behavior of Russians,
which implies the principle of "less spending — more saving", approaches
"gradual exhaustion", states the bulletin on the current trends in the Russian
economy, which has been prepared by the Analytical Center under the Government
of the Russian Federation (RBC has a copy of the Bulletin). Personal
consumption in 2016 was the main driver of GDP decline, having decreased by 5%
compared to the previous year, while real retail sales of goods fell by 5.2%.
However, real incomes of the population decreased even more — by 5.9%.
According to the authors, the fact that the consumption drop was not that deep
as that of incomes indicates a change in the model.
On the other hand, a "new level of equilibrium" for some durable goods has taken shape in the market. In particular, this has to do with refrigerators, washing machines, and televisions, whose sales, although being restored, still remain 25-35% below the level of 2014 (in comparable prices). The car market has also begun to recover gradually (according to the Association of European Businesses), however, car sales in 2016 were 43% lower than in 2014.
"Over the past decade, there has been a significant accumulation of durable goods (light motor vehicles, computers, refrigerators, televisions, furniture, etc.) in Russia's households. In fact, a significant renovation of all household funds has taken place, a kind of a consumer ‘safety cushion’ has been formed," explained Aleksandr Golyashev, the expert of the Analytical Center, in a conversation with RBC. Most likely, "the level of saturation with these products has become optimal for the population," and at the same time, it happened before the recession in 2015-2016, he adds.
The fall of the ruble at the end of 2014 was accompanied by a sharp increase in sales — as a consequence, people had bought expensive goods for several years ahead, which was the reason for the subsequent reduction in sales of durable goods, says Golyashev. Russians more easily tolerate a protracted decline in real incomes, changing the structure of personal consumption in favor of food products, the expert believes. The fall in food turnover, according to the Russian Federal State Statistics Service, was not as profound as that of durable goods (5.3% at the end of the year). However, it turned out to be a little more substantial than the reduction in sales of non-food products in general (5.1%). In 2015, the situation was reversed: the consumption of food fell by 9%, and non-food products — by 10.9%; however, this was due to a high base — the consumer boom in 2014.
More details — on the pages of the bulletin "Personal consumption of goods".
For other issues of our bulletin on current trends in the Russian economy see Publications.
Photo: from open sources