Economic Recovery and Rising Consumer Confidence to Improve Ukraine’s Retail Market Outlook: Ken Research

Key Topics Covered in the Report•Detailed profile of the Retail Market in Ukraine•Consumer demographics, trends and behaviours•Historic and forecast retail sales value & growth in Ukrainian Retail Market•Competitive landscape of Ukraine’s Retail Market•Analysis of key distribution channels of Ukraine’s Retail Market•Emergence of online retailing in Ukraine’s Retail Market•Detailed analysis of changing retail dynamics across various product segments

Ken Research announced its latest publication on, “The Future of Retailing in Ukraine to2020; Comprehensive data overview of the market, with retail sales value and forecaststo 2020”, offer insights on the category and channel trends within the Ukrainian Retailmarket.The report further covers the overall retail sales of products through four channelgroups (Value Retailers, General Retailers, Specialist Retailers and Online) which includes17 individual channels, such as Hypermarkets, supermarkets and hard-discounters; Homeimprovement and gardening supplies retailers; Food and drinks specialists; Online;Convenience Stores (including Independents) and Gas Stations; Department stores;Clothing, footwear, accessories and luxury goods specialists; Other specialist retailers;Electrical and electronics specialists; Home furniture and homewares retailers; Value,variety stores and general merchandise retailers; Music, video, book, stationery andentertainment software specialists; Cash and carries and warehouse clubs; Other generaland non-specialist direct retailers; Drug stores and health and beauty stores; Vendingmachines; Duty free retailersThe analysis of the aforementioned trends has been doneacross nine product groups including Apparel,Accessories, Luggage and Leather Goods;Books, News and Stationery; Electrical and Electronics; Food and Grocery; Furniture andFloor Coverings; Health and Beauty; Home and Garden Products; Music, Video andEntertainment Software; Sports and Leisure Equipment

Economic Environment of UkraineThe economy of Ukraine is an emerging free market. The economy has experienced aconsistent fall in the GDP for a period of 10 years, starting 1991 that is following thecollapse of the Soviet Union. However, as the Ukrainian economy began to recover in2000, with a rapidly growing GDP between 2000 and 2008, the growth was ceased bythe global financial crisis that reached Ukraine as the 2008-2009 Ukrainian financialcrisis. The economy recovered and achieved a positive GDP growth rate in Q1 2010, butagain in 2013, the economy lapsed into another severe recession and since then, theUkrainian economy has been suffering from a serious downturn.

Stringent and outdated labour market regulations and lack of labour force due toemigration and aging of population, has depressed investment and hurt the productivityof all sectors including that of the agricultural sector. Ukraine which was once known asthe breadbasket of Europe, is now only a far off memory, thanks to the lack ofmodernization of the Ukrainian agricultural sector. The government procurementprocedures in in Ukraine is biased towards the domestic companies, as a result theinvestors will not purchase the agricultural land. Russia-Ukraine conflict continues whichaffects investment flows and trade along with the ever increasing number of non-performing loans.

Looking at the key economic snapshot of the country, Ukraineis the home to 42.8 millionpeople. With a GDP of $370.8 billion and a per capita income of $8,668, Czech Republichas a global ranking of162ndand a regional ranking of 44th in Europe. The GDP has anegative growth rate of 6.8% and a 5 year compounded annual growth rate of -0.2%. Thecountry has an unemployment and inflation rate of 7.7% and 12.1% respectively.

Brief Overview of the Retail Market in UkraineThe per capita retail sales in Ukraine is significantly low, lower than that of Russia andWestern Europe, despite having the 6th largest population in Europe. Political instability,tough economic environment and strong currency devaluation are all factorscontributing to reduce the consumer’s purchasing power in Ukraine. As a result, theUkrainian retail market’s current situation is not very bright. As incomes are falling,people are cutting on their expenses, even on the essential of goods. As the Ukrainiansobserve rising prices of products and services, they economize their purchases and limitthem to the most necessary products. As a result, the sales volume were highly affectedwhich was slightly compensated by the rising prices.

Apart from the aforementioned factors working to contract the sales volumes, the fallingpopulation owing to the separation of Crimea in 2014 and inactive purchases from thepeople living in the Eastern regions led to a fall in the volume of sales in Ukraine.

Coming to the various channels of distribution, convenience stores and discountersremain the most popular distribution channels. General retailers hold the largest shareof retail sales in 2015, and will continue to lead the market in 2020. There has been atremendous increase in the quality trading areas by the rising stock of modern shoppingcentres which in turn has attracted many well -known international brands to theUkrainian retail market. Online trading is another emerging channel of distribution. Thetotal turnover of online trading in Ukraine has already exceeded USD 1,000 m, and in2010 and is expected to register the fastest growth during the forecast period.Hypermarkets, supermarkets and hard-discounters recorded the highest channel salesvalue. In the product category, Furniture and floor coverings is expected to grow thefastest followed by Music, video and entertainment software over the next five years.

Major Players in the Ukrainian Retail MarketThe grocery retailers proved to be more competitive than their non-grocery counterpartsas non- grocery products could be economised in the time of economic difficulty. As aresult, the Ukrainian retail market is led by grocery retailers.

The major food retailers in Ukraine are Fozzy group and ATB market which had a majorcompetitive advantage due to their nationwide presence. Other major food retailerswere Metro Cash&Carry, Auchan, Amstor, EKO market and many more.

The Ukrainian food retail market is highly fragmented with the top 5 retailers holdingonly 15% of the market share in 2010. Share of unorganized trade such as open marketsis still very high, accounting for almost 50% of the total food retail sales.The major non grocery retailers operating in the Ukrainian retail market are Foxtrot,Comfy, Eldorado and some international retailers such as Yves Rocher, L’Occitane andLush.

Ukraine’s Retail Market ProspectsThe retail industry is one of the most dynamic and prosperous industries of Ukraine,contributing 16% to the country’s GDP and ranking third in terms of total foreigninvestment inflows. The growth prospects of the Ukrainian retail market is dependenton a number of factors such as the economic recovery, speed of dispute settlementwithin the country and Europe, return of consumer incomes along with the consumerconfidence.

Some of the key factors expected to drive growth of the Ukrainian Retail sector are:Rising consumer incomesStable national currency reduced exchange risksIncreasing proportion of young populationAvailability of quality commercial real estate

However, the retail market in Ukraine is also subject to certain challenges such as lowsalaries in some part of the country prevents the growth of non-grocery retailing,widespread employment in the private farm sector supports the continued existence offarmers’ markets and restricts the growth of the retail sector in the country.

To know more on coverage, click on the link below:https://www.kenresearch.com/consumer-products-and-retail/wholesale-and-retail/future-retailing-ukraine/40170-95.html

Related Reports:https://www.kenresearch.com/consumer-products-and-retail/wholesale-and-retail/future-retailing-czech-republic/40169-95.html

https://www.kenresearch.com/consumer-products-and-retail/wholesale-and-retail/future-retailing-belgium/21551-95.html

Contact:Ken ResearchAnkur Gupta, Head Marketing & Communicationsquery@kenresearch.com+91-124-4230204