Sberbank’s hypothetical Russian middle-class family metric – the ‘Ivanovs’- shows the average Russian family is concerned about high inflation, though that is still barely denting some peoples’ aspirations of getting behind the steering wheel of a new car.
April’s Ivanov index, a survey of more than 2,300 adults across 164 cities in Russia with a population of more than 100,000, notes people are still concerned about persistently high inflation, which in Russia is at around 7 percent.
Household budgets are most concerned by this factor (70 percent), up 1 percent from two months ago, as the average family spends around 40 percent on food. To put that in context, consumers in western Europe spend on average between 15 and 20 percent of income on food, according to the research. But more than 40 percent of respondents still plan to spend on one big-ticket item – to replace their car within the next two years. That is slightly down from 42 percent in the previous survey in February. Car markers have invested heavily in Russia, with sales growing more than 10 percent in 2012 according to AEB, the Association of European Business, as a relatively low level of car ownership and large numbers of older vehicles need replacing.
The Ivanovs’ worries are not surprising, given 10 percent of corporates are hiring new employees versus 47 percent seeing a headcount reduction.
A dent in consumer confidence has had a knock-on effect on the X5 retail group, according to the research. Shares in London-listed X5 retail group have shed 63.74 percent from a peak peak in Jan. 2011, but are still well above the post-crisis trough hit in 2008. The effect, the analysis concludes, is seen more in average spend, rather than because of reduced footfall. That is mainly because of a more limited assortment range, quality and freshness of the products.