The stable and growing economic conditions of Russia have worked wonders for its retail industry, particularly non-food retail sector, which has started to expand tremendously and is expected to outshine the food sector in near future.
“Russian Food and Non Food Retail Forecast (2007-2011)”, the latest report from market research company RNCOS, is a study of the Russian retail industry. The report predicts the Russian retail industry to climb up at a CAGR of 17 per cent during 2007-11 and the non-food sector will have a higher share in the combined retail sales than the food sector.
The report says that during the forecasted period, non-food retail sector is anticipated to grow at a CAGR of 19 per cent and cross US$468 billion by 2011-end. On the other hand, the percentage share of food retail sector, which is expected to ascend at a CAGR of 13.7 per cent during 2007-11, has been falling year-on-year since 2001 in overall retail sales.
A senior analyst at RNCOS said that the growth of non-food sector owing to increasing disposable incomes, economic stability and growth, rising purchasing power, and changing buying habits of Russians are directing this transition of consumption trend.
The RNCOS research also marked the areas that will show substantive growth in the non-food retail sector; these include household cleaning products, cosmetics and toiletries, computers, furniture and washing machines. As per the report, clothing segment will have the major share in non-food retail sales in terms of market value.
In the long run, the retail growth in the country is projected to remain strong but some factors, including ineffective distribution network and poor infrastructure (leading to high logistics costs and inventories), may disturb the trajectory.