“Negative dynamics”: how dying retailers

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«Негативная динамика»: как умирают гипермаркеты

Russian retailers are caught between Scylla and Charybdis. Blame economic stagnation and empty the wallets of buyers.

Not so long ago “good form” to purchase products for the week ahead. To do this, the Russians went in hypermarkets, although the trip often had long.

Today, things have changed. A steady trend of recent years — “shopping at home” more and more to entice buyers. Retailers for some time lost, but now trying to change it — still in the fight for customers the strongest survive.

The laws of the concrete jungle

According to experts, one of the main problems is that key players in the market has slowed down in development. The crisis has affected many “titans”, and now they’re trying to figure out how to keep up with the times.

Thus, the X5 Retail Group is a large-scale “Carousel” increasingly open “Crossroads” and “pjaterochki” — a typical “convenience stores”. Auchan and is developing a new compact format grocery outlets.

Reforms are taking place in hardware stores. For example, “Maksidom” plans to reduce the area of hypermarkets from 12 to 4 thousand square meters. Not without losses — Castorama lost in the struggle and announced the closure in Russia.

“Shopping at home” also developing, adopting some features of the older brothers. Cooking appears in economic “Magnets”, and “Crossroads” place café. This format has already appeared, for example, in the Leningrad region.

The numbers speak for themselves. While “Crossroads” and “roundabout” are showing growth, owned by the same retailer, “Carousel” is not pleased with owners: net revenues in 2019 decreased by 4.9%.

Changes in the field explain the protracted financial crisis.

Again, blame the economy

The demand for purchase “in store” is often explained empty wallets. A trip to the supermarket is expensive: the truck is full, and the gasoline and the fare is not cheap. In the end, the Russians have increasingly come to the conclusion that it is easier to run to the store around the corner where the figure in check will not cause wounds. It is important not to calculate the final cost after each trip for groceries.

“Now the General bent all. Sales in the “Tape” dropped, purchasing power has fallen — said former employee of the hypermarket in Saratov, worked in it for over 10 years. — Go to the “Magnet” has become easier and cheaper. At the end of my work the impression that “the Tape” crisis”.

The interviewee said, for example, the reductions in the company four years ago. During the ten years buyers are constantly getting smaller, said the former employee. She explains that the economic crisis in the country. Problems proves herself the “Ribbon”.

Do not forget that the experts, in principle, note the decline in consumer sentiment in Russia. It’s such a scale, which shows the optimism of buyers relative to the economy through consumption and savings. In 2019 the index fell, with just 5 points.

“The negative trend is due, first and foremost, the prolonged stagnation of the economy. In particular, we are talking about growing loan debt burden and the decline in real income for six consecutive years. In the absence of prerequisites to improve the situation, the consumer becomes more prone to save money”, — stated in the final report analytical services in the field of commercial real estate “Shop of shops”.

In the end, retailers slowed in development, which was used by discount stores and shops around the corner.

In search of lost time

Experts agree: the trend is “convenience stores” have declared themselves in the world. Petersburg did not remain on the sidelines, the Director of Department of trading real estate Colliers International Irina Tsarkova. And not only in the financial crisis.

“Format “shop at home” more and more popular and is actively developing in St. Petersburg. And many retailers are in the process of transformation in the supermarkets. This is a logical development of events,” affirmed the interviewee.

In particular, Tsarkova mentioned the growth of online sales and the high tempo of life. Today time is the main resource and “purchased in store” in the distant hypermarket is no longer profitable. In turn, retailers have realized the needs of consumers and trying to optimize space, to adjust the internal logistics, as well as create extra areas to service online orders.

With the same purpose of hypermarkets now brought food to the house. So, on the one hand, finally “bury” hypermarkets still still early. Besides, the demand for stores around the corner — a phenomenon that is typical, especially for cities.

“In small towns the hypermarket format is still popular as a trip to the store is more often associated with entertainment, recreation,” said Tsarkova.

But in a whole new trend of optimism to major retailers brings. Changes in hypermarkets require large financial costs, and the economic crisis does not promise benefits. Castorama had fled from Russia — and can bring other players in the market.

Especially that the problems in the economy has hit even “convenience stores”. Recently, the market left “Intertorg” owned trademarks of Spar and “Family”. Once popular in St. Petersburg and North-West network went bankrupt, and lenders require a return of billions of rubles. The head of the company explained the problem simply: the country has decreased purchasing power.

The crisis has hurt and indiscriminately suffers not only the common people but also business. In the end, the hypermarkets are caught between Scylla and Charybdis: an outdated format and ruin the economy.

To do without victims will be difficult.

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