Russian shoe makers are preparing for the fall in 2015 year of demand for shoes for 20-40% due to rising prices and lower real incomes of the population. Prices in the market, where 90% is imported, will rise by 20-25% already in the spring-summer season, retailers themselves say.
In the economic segment, there will not be a reduction in demand, experts say, because shoes have a limited service life and are second only to food products in terms of demand. But the middle and expensive segments on which shoe makers earn money will greatly fall.
“The buyer has become more rational,” said Igor Subbotin, director of the Ralf Ringer retail chain. Many people buy for future use: they are insured against future price increases, ”he said.
Director General of the National Shoe Union Natalya Demidova found it difficult to predict a drop in demand, but said that it has been observed since 2014. According to her, in general, people began to buy about half of not only shoes, but also other consumer goods, and the attendance of shopping centers dropped. “There are different estimates, some retailers complain that they have empty stores, they have to work to zero in order to keep their customer,” she said.
The Shoe Union estimates the annual volume of the Russian footwear market in physical terms at 550-600 million pairs, and in monetary terms at approximately 12-20 billion dollars / large variation is caused by the high share of the shadow business -35-40%. Imported footwear occupies about 90% of the market, and as part of domestic footwear production up to 70% of imported components, Demidova complains about the lack of prospects for a significant increase in domestic production.
Against the backdrop of the devaluation of the ruble, imports of footwear to Russia in January, according to the Federal Customs Service, fell by 44,1% compared to last year's January. The reasons are a decrease in orders due to expectations of a drop in demand and the retreat of sellers "into the shadows", according to the branch organization. "
The changing market situation is forcing shoe makers to take action. Someone is reviewing the investment program, someone is cutting plans to open new stores in connection with the problem of obtaining loans. Companies hope that in the second half of 2015, the situation will improve, including due to pent-up demand from buyers who refuse to buy shoes in the current conditions. When the situation changes, shoe makers are ready to quickly resume investing in new outlets.
“We hope that the crisis will cut off the weak. Now the market is very little consolidated, I would like the strongest to survive, ”concluded Demidova from the National Shoe Union.