Russia: Russian Retailers Modify Strategies as Economy Slows

Towards the end of 2014, the Russian economy entered a very difficult period as it was hit hard by record-low oil prices, dropping consumer purchasing power, a food import ban which pushed up inflation, and ruble devaluation. As a result, Russian retailers have begun implementing new business strategies which optimize expenses and improve staff productivity. Although the government is still only considering new price control measures, local officials in the regions have held meetings with retailers and encouraged them to (a) set minimal mark-ups for socially important products, (b) sell more locally-produced food products, and (c) freeze prices for private label products. Shortly afterwards, several major Russian retailers e.g. Dixie, Metro Cash&Carry, and O’Key, announced that they would freeze prices for 20 socially-sensitive foodstuffs. Dixie notes that the cost of the basic food basket would remain unchanged until March 9, 2015.

Russia: Russian Retailers Modify Strategies as Economy Slows