The decline in tourism industry due to restrictions on international flights for pandemic COVID-19 may play into the hands of food retailers according to a forecast by the National rating Agency (NRA). The Russians, abandoning abroad, will spend money inside the country that can bring the retail up to 80 billion rubles.”the Part of consumers, which in past years has been abroad (on holiday, and now have decided to stay home.— “B”), will enter into an active client base of retailers this summer”,— stated in the provided “y” NRA review of grocery retail. Analysts state that the number of outbound trips almost twice the number of the entry. The Russians refused to leave abroad, will enable retailers to increase revenue in the third quarter, traditionally not a very successful period, conclude analysts.Agree with this in X5 Retail Group and Auchan. The results of the second quarter for the grocery chains, too, may be above expectations due to excessive demand during the high alert mode because of the pandemic, I believe in the NRA. But, says Director of the rating service NRA Sergei Grishunin, a demand has forced retailers to build up stocks: so, the X5, their share at the end of March in current assets made up 76% is the maximum for the last ten years.From the decline of the tourism industry grocery retail can get in July—September of 60-80 billion rubles, predicts the head of Department of trading operations on the Russian stock market “freedom Finance” George Vashchenko. Previously, the Association of tour operators of Russia was assessed losses of companies in the sector of tourism 25 billion rubles this summer. The effect of the reduction of tourist flow network can see only in Moscow and St. Petersburg, says a senior analyst of Gazprombank Marat Ibragimov. In addition, he said, the “Magnet” in the third quarter is usually the sales are growing at the expense of domestic markets network is the South of Russia, where are the summer resorts of the country.Meanwhile, the NRC acknowledged that “the impact jammed the house of tourist” is not so much affect the growth of retail turnover by the end of 2020. It could rise to 17.1 trillion roubles under the baseline scenario, implying a decline in GDP of 3.5–4 per cent and inflation at 4.5–5%. In the pessimistic scenario (GDP decline of 6.7–7.5% and inflation at 5-6%) will increase to 16.7 trillion RUB. For comparison, in 2019 the turnover was 16.1 trillion, 1 trillion more than the year before. All these years, the turnover increases mainly due to inflation, says Georgy Vashchenko. But this year, adds Sergey Grishunin, the growth rate will decrease due to the decline in real incomes. This factor can even lead to decrease in turnover of the industry at the end of 2020 is 5%, does not exclude personal broker “BCS” Victor Shcheglov.In its report, the NRA comes to the obvious conclusion: Russians are trying to save money on products, will switch to the discounters. From this can win Dixy, Magnit and X5 (Pyaterochka is 79% in total retail revenue of the group). In X5 I hope so, too: “”the roundabout” will be in a better position due to the flow of buyers of large formats and more premium segment.” Discounters “Yes!” is an 11% income group “O’key”, which is the main part of the business hypermarkets. This retailer, like “Tape” that hypermarkets bring over 90% of revenue, do not expect this year to increase its market share, warns the NRA. In “Dixie”, “Tape” and “Magnet” to questions “b” is not answered.Now again, there was the development of hard discounters format for the type of network “Traffic light”, says Mr. Vashchenko. “It is like a rollback in the 1990-ies,” he adds. By the end of 2020 retailers are trying to increase traffic, start pricing competition due to the increase in promotions, says Victor Shcheglov. Networks are forced to cut margins amid rising procurement prices from producers, it lay in the cost of their additional costs on implementation of new sanitary rules for COVID-19. This, indicate to the NRA, “can reset the low profitability of the industry”. From X5 in the first quarter of 2020, our operating margin has decreased to 5.1% compared to 5.7% in the same period last year.Khalil Amine, Anatoly Kostyriv

Previous articleCame in from the cold
Next articleStop The Sultan Kazakhstan closed from Russian cars
Jennifer Alvarez is an investigative journalist and is a correspondent for European Union. She is based in Zurich in Switzerland and her field of work include covering human rights violations which take place in the various countries in and outside Europe. She also reports about the political situation in European Union. She has worked with some reputed companies in Europe and is currently contributing to USA News as a freelance journalist. As someone who has a Masters’ degree in Human Rights she also delivers lectures on Intercultural Management to students of Human Rights. She is also an authority on the Arab world politics and their diversity.