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This year, consumers did not meet the expectations of the retailers, who were hoping for a New Year's Eve boom. There are few days left before the New Year, and the Ukrainians are in no hurry to buy gifts. Executive Director of Zarina jewelry house Kateryna Netovkina says that this year’s sales are 20-30% lower compared to the same period of the last year.
"This is less than we expected," she admits. The similar situation is on the market of clothes, perfumes, and household appliances. For example, today the sale of household appliances is 25% lower compared to the pre-New Year period of the last year, adds the head of the Eldorado Vyacheslav Sklonnyi.
The situation in the food segment is similar. The traditional pre-Christmas rush in supermarkets is not observed, says the director of the Ukrainian association of suppliers of retail chains Oleksiy Doroshenko. "Sales have decreased by about 7% in real terms," he says.
New Year's festive board for 900 UAH
This year, most of the customers save on gifts. "People tend to buy jewelry made of silver or something very little and cheap made of gold," says Netovkina. The consumers do not look for the electronics gift - smartphones, tablets, products for the maintenance of beauty. Expensive fragrances (4-6 thousand UAH per bottle) often stay on the shelves.
The food supermarkets consumers prefer low-cost goods. For example, import products remain virtually unclaimed, except caviar and alcoholic beverages. Alcohol of the foreign production is very popular due to the relatively low price, which is comparable to the Ukrainian producers. Doroshenko says that inexpensive New Year's table for four people will cost 900 UAH. This money is enough for buying a bottle of sparkling wine, dry wine, and vodka, as well as the ingredients for the sandwiches with red caviar, olives, herring in “shuba-coat”, baked chicken and potatoes. "This is a good table for the crisis period," said the expert. According to estimates of Ukrainian association of suppliers of retail chains the cost of the most popular New Year's salad has not changed much since the last year in the table. For example, the cost of salad weighing 1.5-2 kg is around 80 UAH, and herring in “shuba-coat” is 31 UAH.
Low prices, low consumers’ attitude
The level of customer life falls, so users save on gifts. Most employers did not raise wages this year, while consumer spending was constantly increasing. The utilities has grown almost doubled in the last year. This causes consuming decrease. According to GfK Ukrain research company e, in November consumer sentiment index fell by 4.1 points In comparison with October and amounted to 47.4. All components of the index have decreased, and the moods of all Ukrainians has changed, which is connected with the current financial situation and the devaluation. "The decrease of consumers’ attitude in November 2016 is connected with the increased devaluation expectations. At the same time, the index of the feasibility of making large purchases in November have not changed and remained at the level of the previous month. However, despite the November’s deterioration, the average value of the index of consumers’ attitude for the 11 months of 2016 is higher than the average value of the index over the 11 months of last year," as said in the GfK Ukraine report.
Part of the Ukrainians have bought Christmas gifts during Black Friday, in late November. For the first time, most of the Ukrainian retailers joined the sale, most of them provided a discount of 30-40%. Black Friday sales grew two three times compared to the average day.
Another reason is the relatively low prices, provided by the retailers. Most of networks are willing to provide discounts on the average by 40-50% when purchasing the second product, but still this is too expensive for the consumers. The majority of customers rely on direct discounts, 50-60% from the original cost of goods. But retailers do not need big savings, since they sold most of their products during the previous season and stayed with the unconventionally small residues. Large-scale sales would start no earlier than mid-February, when prices on the winter collection will reach 50-70% of the original price. But the range of products with the discounts appears to be small. The stores expect to sell all the stocks much earlier.