Ukrainian retail falls by 8% in 2013

18 Dec 2013

Kiev

In 2013, treat the growth rate of the retail trade market in Ukraine decelerated by approximately 8% and its value reached UAH 633bn (?62bn or $79bn). The drop is mainly due to the country?s economic difficulties such as declining GDP, and private consumption and growing uncertainty. These are the first findings of the PMR analysis of Ukrainian retail included in the newest report Retail in Ukraine 2014.

 

Since 2005, sickness the retail sector (excluding the sale, maintenance and repair of motor vehicles, and retail trade in fuels) has been among the fastest developing industries in Ukraine?s economy, with annual growth rates exceeding 30%. Increasing disposable income, steady development of the economy, and growing propensity for modern retail formats have been among the key drivers behind this strong double-digit performance.

 

The 30%-plus year-on-year annual growth (in nominal UAH terms) in the Ukrainian retail sector continued up to 2009. That year it increased only by 4%. In 2009, negative real disposable income growth, double-digit inflation, mounting unemployment, difficult access to consumer loans and weak economic expectations drove the consumer confidence index (CCI) down to its lowest level during the last decade, ultimately forcing the retail sector to contract.

 

In 2010, the retail trade market bounced back in terms of value, managing to return to a 20%-plus year-on-year growth rate. In 2011 and 2012, the market continued to rebound. It was strongly supported by the recovery of the Ukrainian economy, improving consumer sentiment, decelerating inflation, growing real disposable income, and an increasing propensity for modern retail store formats. All these factors contributed decisively to again nearly 20% year-on-year growth recorded by the Ukrainian retail industry in 2012, propelling market turnover to UAH 584bn (?57bn or $73bn).

 

Since purchasing power has not notably recovered and retailers? expansion in the first nine months of 2013 was worse than in the preceding year, PMR expects the retail sales value to slow down to approximately 8% in 2013. The size of the retail market could reach UAH 633bn (?62bn or $79bn) this year, according to PMR estimate. It is worth noting that despite reducing its growth pace, the retail market remains the most dynamic sector of the Ukrainian economy.

 

In 2014-2019, despite steadily increasing private consumption in the country GDP will not grow significantly, PMR expects the retail market to increase its growth rate in subsequent years only by about 13% on average.

 

 

 

 

 

Ukrainian retail achieves 8% growth in 2013 | Converting Guide 18 Dec 2013 at 20:01

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