Russian Consumers Storming New, Modern Shopping Malls

It’s no secret that Russian consumers have always loved to shop. Recent rises in disposable income have made it easier for more Russians to satisfy their appetite for a range of discretionary products. In particular, Russians with roubles to burn are racing to the numerous new, modern shopping malls that have sprung up across the country in recent years. A far cry from the drab Soviet-era GUM department stores, the glitzy new malls provide not only endless shopping opportunities but allow visitors needing a break to eat, watch a movie or ice skate, among other diversions. Indeed, one Moscow mall visitor asked about his shopping experience looked around and told the New York Times “I feel like I’m in Disneyland.”

Disposable Income and Discretionary Spending: 2007-2012

Disposable Income and Discretionary Spending 2007-2012

Source: Euromonitor International from national statistics

Note: Discretionaryspending refers to consumer expenditure on all goods and services excluding housing and food and non-alcoholic beverages. Data are in constant 2012 prices.

In 2012, British retailer Debenhams opened its first store in the giant MEGA Belaya Dacha mall in Moscow. According to commercial consultant Russia IC, “Experienced retailers, Debenhams appear on the Russian market exactly at the time when the trend for ‘universal shopping’ is on the rise. More and more Russians, especially in Moscow, prefer to visit trading centres and shopping malls, particularly on weekends. A shopping centre is a place both for leisure and shopping and is frequented by families… Moreover, with the arrival of Debenhams there is a chance that seasonal sales will gradually become a part of Russian shopping habit”.

At the same time, however, observers compare the passion of contemporary Russian mall shoppers to those of US shoppers in the 1960s and 1970s. So it may be fair to speculate that in coming years the habits and attitudes of many Russian shoppers may change and come to resemble those of many of today’s American shoppers, especially as the number of malls reaches its saturation point. In particular, many Russians may tire of the lure of Disney-like environments and, like many current price-conscious American shoppers, find greater satisfaction in securing a bargain, even if they can’t ice skate between shopping spells. For example, three US-style discount outlet centres are under construction in Moscow, meant to attract consumers looking not only for brand names but also looking for low prices. And while membership-only warehouse outlets are not yet on the horizon, it is not unimaginable that a number of Costco-like mega-stores may eventually appear to satiate Russia’s bargain-hunting consumers.

If these and other new retail formats eventually click with Russian consumers they will change the way many approach their shopping. Certainly, a greater number will check prices more carefully and plan their shopping excursions with greater precision. More will opt for the convenience of driving so they can bring their bulging bags of bargains home with greater ease. Generally, for many shopping will become less of a leisure activity and more of a well-executed strategic retail mission. In the meantime, however, it is safe to say that most Russian consumers are still enamoured of their shopping malls, and the attraction to style over savings is expected to continue for at least the next several years.