What key global retail market trends

have impact on Russian retail

environment and how to adapt

business to changing environment?

PwC has launched special survey for

SPIEF 2019 session "Digitalization of

retail: technology and leadership"

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Our latest researches and publications

Latest Retail & Consumer market trends

Q1 2019

We continue the practice of regular

analytical updates showing key

trend on Russian R&C market.

Martijn Peeters

PartnerRetail & Consumer leader, PwC Russia

martijn.peeters@pwc.com+7 (495) 967 6144

Contacts

PwC’s 10th annual Global Consumer

Insights Survey gathers the sentiments

of more than 21,000 online consumers

in 27 territories — shows that

technology has put them in a position

to demand a tailored, channel-agnostic,

socially conscious and social media-

powered experience.

1Global consumer insights survey 2019

(Russian edition)

2Digital era in retail: Future success

depends on the ability to adjust to

digitized environment now

3Regular market research update

Find more publications at:

Perekrestok 7,6% 12,7%

11,6%Pyaterochka

5,0% 4,9%Lenta

0,6% 8,3%Magnit

0,7

Karusel

O’KEY

How do consumers assess changes in their financial situation

in the last 12 months?, % of respondents

Readiness for large purchases, % of respondents

Retail turnover growth*, Q4’17 – Q1’19, Y-o-Y, %

-1,3% 2,0%

-1,4

LfL Sales

% growth based on

other factors,

including opening /

closing stores

Total % revenue

change, Q1’19 to

Q1’18, %

Acceleration of current inflation has not strongly reflected consumer

expectations

GDP growth declined mostly due to increased VAT rate, accelerated

inflation and reduction of real retail sales

Average real wage growth, Y-o-Y, %

31 27 27 31 31 34

5758 58 56 55 52

14 13 12 12 1311

Q2,18

Worsened

No change

+3 p.p.

Q1,19

Improved

Q4,18Q1,18Q4,17 Q3,18

Key trends in consumer behaviour, % of respondents

Q3,18

2.2

Q2,18

2.2

Q1,18

1.9

Q4,17

2.7 -2.2 p.p.

Q4,18 Q1,19

0.5

0.3

Russian real GDP*, Q4,17 – Q1,19 growth, Y-o-Y, (constant 2016 prices), %

Inflation, Y-o-Y, Q4’17 – Q1’19, %

8.7

Q1,18

9.5

10.5

8.6

Q4,17

3.0

9.4

2.4

9.1

Q2,18

2.32.6

Q1,19

9.9

10.2

5.2

Q4,18

10.1

Q3,18

9.9 9.8

3.9

10.3

1.3

Q4,18 Q1,19Q1,18Q4,17

6.35.9

4.17.6

10.2

Q2,18 Q3,18

Current Observed Expected

Accelerated inflation and transfer of wage indexation in public sector

have led to decline in real wage growth

More families believe that their financial situation got worse in Q1 2019

25

2025

2221

22

35

30

32

2927

29

Q1,18 Q2,18Q4,17 Q1,19Q4,18Q3,18

There is a noticeable shift to purchasing cheaper products after pre-VAT

increased spending

Buy cheaperBuy less

More consumers believe current period is bad for large purchases

-37 -33 -35 -35 -36 -38

25 23 21 23 2124

Bad

Q3,18 Q4,18Q4,17 Q1,18 Q2,18

Good

Q1,19

Retail turnover growth was limited by decline in real disposable incomes

which were not compensated by consumer loans

2.4

3.9

Q1,19

3.0

Q4,18Q1,18

2.4

Q4,17

2.6

3.0

1.8

Q2,18

2.7

2.72.3

5.2

Q3,18

2.6

569586538551567

592

Q1,18 Q1,19Q2,18 Q3,18 Q4,18Q4,17

Average check, Q4’17 – Q1’19, Q-o-Q, RUB

Estimation of Y-o-Y revenue growth by factors*, Q1’19 to Q1’18, %

*LfL effect was estimated based on reported revenue numbers and LfL revenue growth rates. LfL revenue

growth rates have been applied to total revenue of the previous period, as share of LfL revenue is not

available.

Turnover Inflation

*Source: Federal State Statistics Service – updated estimates of previous periods Source: FOM, PwC Analysis Source: ROMIR

Source: Central Bank of Russian, FOM

Source: Federal State Statistics Service

Source: FOM, PwC Analysis

Source: FOM, PwC Analysis

*Source: Central Bank of Russia, Federal State Statistics Service - updated estimates of

previous periods

Source: Company reports, PwC analysis

4,7%

Average check has declined following seasonal trend after New Year

period

-3,4% 2,0%

8,9

9,9

16,3

20,3

Most of leading food retailers maintain positive LfL sales growth in

smaller formats stores