The first two months of 2007 witnessed a 12.7% YOY increase in Russian household real disposable income, whereas real average monthly wages grew 17.5%, as said by the top statistics body in the country on April 3, 2007.
Rising disposable incomes have prompted all sorts of consumption. New foreign cars’ sales touched 600,000 in 2005, representing 57% rise over the previous year (2004) and a six fold rise from 2001. Ownership of mobile phones has burgeoned from three million in the year 2000 to 80 million in the year 2006. With rise in income, by the year 2010 the amount spent of food is expected to come down to 35% and housing (accounting for 15%) will become the 2nd largest expenditure. Spending on communication, housing and transport will double.
Craving of Russians for joe (brewed coffee) indicates that, besides the rise in incomes, changing lifestyles & tastes are driving the boom in consumption. Before 1990s, Russians scarcely touched it, since they preferred tea. Swift growth has elevated the profits for firms like Denmark's Carlsberg that enjoys 50% of prominent brewer Baltic Beverages Holdings of Russia. Analysts are optimistic about the immense growth potential that exists in fields such as financial services, tourism, and consumer durables namely electronics, furniture, and automobiles.
In its report on “Russian Retail Sector Analysis (2007-2011)” RNCOS notifies, “Growing at a CAGR of 26.41% during 2001-2006, disposable income had reached US$ 549.74 Billion last year (2006). This continuous increase in disposable income has been spurring the purchasing power of consumers which has propelled Russian retail market so far.”
The report is a must read for all those having interest in Russian Retail Sector. Key facts and issues this report analyzes include: market size and scope of the Organized Retail in Russia, growth prospects and issues related to the industry, factors driving growth in this sector, organized market segment wise & its growth prospects, opportunities & challenges faced by retailers in Russia and emerging trends there, and so on.
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