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Retailers are holding back prices in Russia
17.11.2014 3683

Retailers are holding back prices in Russia

There is a trade anomaly in the country: in terms of dollars and euros, many goods are cheaper than in Europe, although it has always been the other way around. But after the New Year, even sellers who have frozen ruble prices in order to maintain sales will be forced to respond to the growth of currencies.

No one canceled Russian taxes, customs, rent and bribes.

Shoppers return to empty shopping malls. Back in September, according to the research company Watcom, the drop in traffic in Russian shopping centers was estimated at almost 25% compared to the same period in 2013, by the end of October - at 5%. The middle class understands that it will not be possible to wait out the weakening of the ruble. At the same time, prices for many goods have not yet begun or are just beginning to rise.

We have to spend the time remaining until the end of the year in a new trading reality: prices in many Russian stores are the same as in Europe. For example, a pair of women's demi-season boots Ecco in Moscow stores costs 10 690 rubles. This is noticeably more expensive than a year ago, but on the German site Ecco this pair now costs € 195, and we, it turns out, € 187. World leaders of the mass market, such as H&M or Inditex (these are Zara, Bershka, Massimo Dutti and a few other brands), do not comment on the specifics of pricing in certain markets.

“If a product abruptly leaves the price corridor that is customary for the consumer, the brand positioning changes, as a result, the brand begins to lose its loyal audience: although buyers are aware of the situation with exchange rates, psychologically they will not be able to accept new prices in rubles right away,” notes the commercial Director of Fashion Consulting Group Anush Gasparyan. Moreover, for the kings of the mass market, the Russian market is only a small part of their global business. “For Zara and Mango, the Russian market is about 5% of retail outlets, for H&M - 1%. If necessary, they can reduce margins in a particular region, but significantly increase turnover, ”Gasparyan says.

There is a trade anomaly in the country: in terms of dollars and euros, many goods are cheaper than in Europe, although there has always been ...
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