Russia’s leading malls recorded more foot traffic over the first half of this year, suggesting an end to a continuous contraction that has marred retail for the last five years, the latest Watcom Shopping Index reveals, according to Intellinews.
“During the first half of the year the Shopping Index in Russia showed growth of 2.2% with the growth in the leading malls of Moscow and St Petersburg at 1% and 1.4% respectively. From the major urban centers the fastest growth was seen in Yekaterinburg where shopping traffic was up 2.7% over the first six months of this year compared to a year earlier,” Watcom CEO Yuri Skorokhodov said in a press release. “We can state that the negative trend has been broken. People got used to a new reality.”
The Watcom index measures foot traffic at the leading malls in Russia in real time by using security cameras and face recognition technology and is the most accurate measure of activity in the top retailing outlets.
Foot traffic has been falling continuously since 2014 and mirrors the decline in real incomes over the same period. The fall has also been exacerbated by the growing share of e-commerce which now accounts for 4.5% of total retail turnover and is growing exponentially.
“Despite the fact that the Russians got sick and tired of crisis and negative news about economics, we can confirm that consumer sentiment has stabilised due to the lack of ruble volatility and deferred demand,” Skorokhodov added.
Russia’s economic growth has been almost entirely supported by consumption in the first half of this year, although the Bank of Russia (CBR) is worried as much of this consumption was paid for by consumer credit. Consumer credits have been growing by 25% y/y at an annualised rate, whereas real incomes have expanded by about 7%.