The Russian footwear market is expected to suffer a double whammy consisting of higher prices, due to the depreciation of the ruble, and lower demand, stemming from the lockdown to combat the Covid-19 pandemic and economic hardship. The price of shoes is predicted to jump by 20 to 35 percent while sales volumes could slump by 30 percent, with drops of as much as 50 percent in certain categories, according to research conducted by the Moscow-based think tank Alpari.
Anna Bodrova, an analyst with Alpari, feels that the Russian market could be shaken more strongly than the Western Europe one, since many citizens would simply not have enough money to buy new shoes.
Since the beginning of a nationwide self-confinement regime introduced in the country on March 28, sales of shoes and clothes fell by 94.2 percent, according to Russian Business Consulting (RBC). Demand in this segment is nosediving despite the efforts of most footwear retailers to promote online sales, RBC said.
The Russian government has promised to allocate state support to all retail companies forced to shut down their stores because of the novel coronavirus pandemic. In particular, the government has proposed an annual installment plan for deferred tax payments. More state support measures are expected to be announced in the coming weeks.
President Vladimir Putin has extended the retail lockdown in the country until April 30, ordering all stores selling non-essential goods to stay closed during this period while paying their employees.
Russian footwear retailers have moved to selling shoes online, but experienced an unprecedented slump in sales anyway, partly because logistics issues have turned this into a very complicated task. A Russian IT company, Evotor, predicts that half of all the stores selling shoes or clothes could be closed for good in Russia because of the epidemic.
The demand for shoes is not expected to recover for possibly six months after the quarantine is lifted, according to observers. Along side the drop in the value of the ruble, millions of Russians will most likely see their wages shrink because of the economic crisis caused by the virus, so they will have to be very careful with their purchases, wearing what they already have in order to save money.