The economic crisis and sanctions have not made life easier for international corporations working in Russia. But there’s still a way to reap the rewards of changing economic conditions. One potential strategy is to localize. Last week German sportswear company Adidasrevealedplans to close 160 stores across Russia by the end of 2017. The multinational corporation has been scaling back business in the country for the last three years - with many shops already shut down - as consumer demand continues to tail off amid the economic crisis. According to sources close to the company, Adidas has been rethinking its business strategy since 2014 and the closures represent. Read more...
Sanctions may have a negative connotation, but the bans imposed on Russia have actually forced the country to become more self-sufficient. Thanks to governmental subsidies programs for agriculture, investments in the greenhouse business have become increasingly popular among leading Russian businessmen. Source: Reuters Three years ago, Russia imposed an embargo on the import of products from the EU, the U.S., Australia, and a number of other countries in response to Western sanctions. The supply of beef, pork, poultry, fish, cheese, milk, fruit, and vegetables was banned. A few years have passed, but who has won - and who has lost out - following. Read more...
CEOs at Russian companies identify 13 of the biggest issues businesses face in 2017, from geopolitical concerns to climate change. Among Russian CEOs included in the poll, 82 percent see volatility in the ruble’s exchange rate as the biggest threat to their businesses. Source: Igor Russak/RIA Novosti Geopolitical instability, excessive government regulation and volatility in the ruble’s exchange rate are among the main issues cited by Russian CEOs as potential threats to businesses in Russia and internationally. PricewaterhouseCoopers (PwC)polled heads of leading international companies about key trends in the global economy in. Read more...
If incomes continue to drop, however, Russians won’t be able to cut their food budgets and still adequately feed themselves. Any further cuts could mean risking malnutrition. According to the UBS study, 56 percent of those polled reported a drop in income in 2016. Source: Zamir Usmanov/Global Look Press Consumers are not willing to further cut food spending even if their financial situation continues to deteriorate. Grocery spending will drop just 5 percent, considerably less than on other items, according to research byUBS Evidence Lab, which polled 1,000 Russians. If their personal financial situation worsens, Russian consumers are prepared to cut. Read more...
Labor in Russia is now paid for only slightly higher than in India and Bulgaria, according to a study by a Russian state academy. Russians' real disposable income has fallen by 12.3 percent since the beginning of the economic crisis in 2014,writesthe TASS news agency, citing a report prepared by theRussian Presidential Academy of National Economy and Public Administration. The report concludes that the continuing fall in the population's real income has led to an increase in the poverty level, which in the January-September 2016 period was 13.9 percent. This indicator is higher than the level from similar periods in 2012-2014, says the report. In May. Read more...
A new report by government analysts studies the impact of Russia’s embargo on Western food imports and decreasing incomes, and shows the changes in consumer spending patterns. The fruit and vegetable market has suffered small losses due to the growth of nonindustrial backyard production. Source: Valeriy Melnikov/RIA Novosti The sharp decline in the incomes of Russians, coupled with the introduction of the embargo on Western food imports in 2014, has led to a decline in the quality of consumption: Russian citizens are being forced to switch to cheaper products and spend more on food, experts from the government's analytical center have concluded. At. Read more...
Rising poverty levels due to a decline in real income are increasingly forcing Russians to go without non-essential goods. Experts do not see any potential for improvement in the situation in the near future. The number of poor Russians who had begun economizing on goods and services had increased to 89%. Source: Alexander Ryumin/TASS As real incomes continue to contract in Russia amid an ongoing economic slump, spending on foodstuffs is taking up a larger and larger part of the average citizen’s budget. In February 2016, for the first timein eight years, food and alcohol, along with tobacco products, were the main part (50.1 percent). Read more...
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