Russia’s Retail Sales Declining in Mom Terms

Russia’s consumer indicators for April give a mixed impression. On the one hand, a continued decline in consumer demand confirms the recessionary trends in the Russian economy. On the other hand, a slowdown in the retail sales fall in mom terms (-2.6% in April vs. -5.5% in March) is already taking place, which may be explained by a moderate relief in consumer confidence. In yoy terms retail sales contracted by 9.8% in April, formally in line with the Q1 15 trend, notes Societe Generale.Food sales remarkably underperformed the previous month’s dynamics (-8.9% yoy in April vs. -7.4% yoy in March). Coupled with high food inflation (21.9% yoy in April), this indicates mounting pressure on less protected groups of the population and an inability of sales to recover fast in the months ahead.Noticeably, the plunge in non-food sales (-10.7% yoy vs -10.0% yoy in March) is not accelerating, which implies a less acute negative shock for consumption. The CBR consumer confidence survey shows that the share of people opting to delay large purchases in April (44%) fell from its multi-year peak registered in March (48%). Should people’s expectations of inflation in one year’s time continue to decline (14.0% in April vs. 15.7% in March) and the CBR continue to ease monetary policy, a sales recovery might be led by the non-food segment.

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