In 2017, the population of Russia continued to adapt to the consequences of the inflationary shock of 2015. Retail sales in 2017 grew slower than the reported real household income, the experts note in their new bulletin on the current rends in the Russian economy titled Consumer Demand: Regional Differences.
The analysts believe that in most economic crises people feel threatened by rising unemployment, accelerating inflation and a general sense of uncertainty in the early stages of the downturn. In this situation households tend to cut back on consumption at a faster rate than their income is contracting.
In 2015-2017, nominal household income increased in all types of regions except for those where people are primarily employed in export oriented natural resources sectors (-0.1% in 2017). The fastest growth was recorded in the less developed agrarian regions (+3.0%), the regions with medium development with equal shares of agrarian and industrial companies (+3.0%) and in the more developed regions with the predominating industrial sector (+2.5%). On the whole across Russia the monthly per capital nominal income was 31.5 thousand roubles while in 2016 it was 30.7 thousand roubles, the analysts write.
In 2013-2017, the highly developed and developed regions accounted for about two thirds of the consumer potential. Based on region types, the three top ones included financial and economic centers (27-28% of the total potential of Russia), agrarian-industrial regions (18-20%) and regions with diversified economies (15-16%).
As for the real retail sales, they went up across all regions in 2017, the analysts note. Real retail sales fell in 2017 in only 17 regions.
"In 2017-2018, the share of groceries in retail sales has begun to slowly decline, suggesting a return to the pre-crisis demand structure. In 2008-2009, the share of groceries in retail sales in Russia went up from 45.0% to 48.6%. 2013-2014 saw this figure stabilize at 47.0% while in 2015 it grew up to 48.7% as sales of non-grocery goods were falling at an accelerated rate," the experts write in their bulletin.
For more information see the Bulletin on Consumer Demand: Regional Differences.
For other bulletins on the current trends in the Russian economy see Publications.