The head of the Ministry of industry and trade of Russia Denis Manturov at the plenary session of «Retail Week-2020» forum stated: «20% of cafes and restaurants in the country had been closed after the introduction of restrictions due to COVID-19 pandemic».
This week, WTC Moscow is hosting the VI international business forum «Retail Week» - a key industry event that forms the main directions for the development of the retail sector, defines the state's approaches to the development of a modern and civilized retail market, and raises the industry's problems. The organizers are the Ministry of industry and trade of the Russian Federation and the Russian Association of Retail Market Experts.
The day before the forum, WTC held a plenary session «Russian retail in the face of challenges and threats. New leadership strategies» with the participation of the Minister of industry and trade Denis Manturov.
Opening the plenary session, Viktor Yevtukhov, Deputy Minister of industry and trade of Russia, called «Retail Week» business forum a highly intelligent platform for exchanging experience between successful representatives of the largest trading players on the market: «I believe that our current platform is a platform of intelligence. And the intelligence is not artificial, but natural human. The intelligence of those people who have achieved a lot in life, and who are now overcoming the most severe consequences that we all face today».
He also stressed that it is still too early to sum up the results of the year, but «anyway, we can predict how this year will end, and what the coming 2021 may bring to all of us. We invite the expert community to discuss these issues. The agenda is very important and saturated».
During his speech, the head of the Ministry of industry and trade of Russia noted that the current situation in trade has mostly stabilized and almost repeats the general economic trend: «Based on results of the last 9 months, retail trade turnover decreased by 4.8%. Any decline is bad, of course, but many predicted a darker dynamic in the spring. Someone said that it would be about 10%, and we had to admit that these forecasts were not without reasons to believe».
Denis Manturov believes that the hype demand for essential products has become the crash test for the food segment: «Empty shopping counters in European cities and the genetic fear of the deficit that our people have become a trigger for mass purchases for future use. At the peak, our grocery sales increased 3.5 times, meat and canned goods - 2.5 times, and today the same thing is happening with medicines. But the distribution network passed this test, and we did without coupons, without a moratorium on prices and other shock non-market decisions».
The head of the Russian Ministry of industry and trade highlighted that it was easier for the food segment. Even in quarantine, stores were not closed, in contrast to the non-food segment. As a result, the sales in April decreased by 40%, in may – by 30%. Public catering and the household services sector "fell" even more: up to 20% of cafes and restaurants did not survive the restrictions and were closed. At the same time, large food retail and online trade showed a significant growth in sales turnover: «Recently, we would have considered this an absolute positive, but now we need to recognize that this is not an additional demand, but its displacement under the influence of the epidemiological situation. Online format and supermarkets simply pulled customers away from small offline retail, as a result, some received benefits, while others stood on the brink of survival. This situation has shown that we need to put even more emphasis on the balanced development of all possible trade formats».
According to Denis Manturov, the distribution network should equally cover everyone - from hypermarkets, stores within walking distance, kiosks and fast-food to restaurants, hotels and gas stations. Fairs, markets, and vans for off-side food trade should become the new routine for cities and towns. Now, to create comfortable conditions, we continue working with lawmakers and the heads of the region: «We will seek the most liberal conditions for small and medium-sized commercial businesses that are ready to develop strictly in the legal field. This applies not only to the food segment, but also to non-food, catering, and household services. We must strictly refrain from permanent bans and restrictions: if this was justified in the spring, now there are ways to reduce risks without resorting to extreme measures».
The Minister also said that there is still a mistaken belief in society that grocery retail has become rich during the forced isolation: "This is certainly not the case. In both April and May, sales turnovers in this sector fell by 10%, price tags remained virtually unchanged, and logistics costs increased. Especially in such conditions, it is difficult to earn money».
According to the head of the Ministry of industry and trade of Russia, "to stay in the trend, retail trade needs to constantly move forward: actively develop, study and implement advanced forms and mechanisms of trade, the latest technologies".
As Tatyana Bakalchuk, the founder of WILDBERRIES, noted in her speech at the plenary session that there is a growing trend in sales of domestic products on the market this year: «What had we noticed this year? Sales of Russian-made goods increased in sales very much. With 40% of the total turnover, they are about 50% for us (WILDBERRIES)».
In addition, Tatyana Bakalchuk stressed that regional suppliers are also showing growth: «In addition to Moscow and St. Petersburg, regional suppliers have grown. For us, it was a great surprise that the third place in sales was taken by the Ivanovo region. The sales in Ivanovo increased by 300%. This is of course an amazing success. We, together with the government of the Ivanovo region, held a number of events to encourage suppliers to come to our site, and this gave the results». In total, WILDBERRIES has about 70 thousand suppliers now, of which 50 thousand are small and medium-sized enterprises, about 25 thousand individual entrepreneurs, and about 6 thousand of self-employed.
As part of her speech, Tatyana Bakalchuk also said that the result of the COVID-19 pandemic was the arrival of e-commerce buyers over the age of 55: «If we are talking about changes in consumer demand, we and not only we have repeatedly said that the age category has changed: buyers aged 55+ have come. As well as a large increase in orders we see in small settlements».
According to the CEO of WILDBERRIES, previously the company could not open order pick-up points in underpopulated areas, but cooperation with Russian Post made it possible to deliver goods: «Now we have orders from localities where 500 – 700 people live. In Summer and Autumn, the number of such orders continued to grow, including due to cooperation with the Russian post. Now we can deliver goods to absolutely small regions, which our delivery previously could not reach at all or we could not open the order pick-up points because of the small population in this regions».
The international business forum «Retail Week» annually gathers federal and regional retail chains, e-commerce, retail, FMCG, IT and service companies, equipment suppliers and manufacturers of products and solutions for retail, banks and telecommunications, heads of consumer market government, industry associations of retailers and other retail market participants.
This year, «Retail Week» is held for the first time in a hybrid format - the offline WTC Moscow part is in a closed format, you can join to the online broadcast after registering via the platform on the site. This made it possible to significantly expand the audience of the forum-speakers and participants from different cities of Russia, CIS countries and abroad.
The large five-day business program, which is held in two languages (Russian and English) with simultaneous translation, includes more than 100 conferences, plenary sessions, round tables and webinars, expert sessions, panel discussions and educational lectures, where top retail experts and government representatives speak.
For the first time, the site hosts a permanent industry «VirtualRetailWeekExpo» exhibition. The exhibitors are represented by a special virtual stand with opportunities for negotiations and establishing new contacts. Unlike the classic format, the stands of service providers and partners of the exhibition can be viewed by all interested participants online from anywhere in the world.
The forum will also traditionally summarize the results of annual industry competitions for the best solutions implemented by various trade formats: «Retail Week Awards» and «Trade of Russia» competition of the Ministry of industry and trade of Russia.