Retailing in Belarus

Discover the latest market trends and uncover sources of future market growth for the Retailing industry in Belarus with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.

If you're in the Retailing industry in Belarus, our research will save you time and money while empowering you to make informed, profitable decisions.

When you purchase this report, you also get the data and the content from these category reports in Belarus for free:

• Clothing and footwear specialist retailers
• Convenience stores
• Direct selling
• Discounters
• DIY, home improvement and garden centres
• Electronics and appliance specialist retailers
• Forecourt retailers
• Furniture and furnishings stores
• Grocery retailers
• Health and beauty specialist retailers
• Homeshopping
• Hypermarkets
• Internet retailing
• Leisure and personal goods specialist retailers
• Mixed retailers
• Non-grocery retailers
• Non-store retailing
• Supermarkets
• Vending

The Retailing in Belarus market research report includes:

• Analysis of key supply-side and demand trends
• Detailed segmentation of international and local products
• Historic number of stores, selling space and values, company and brand market shares
• Five year forecasts of market trends and market growth
• Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

• How big is the grocery/non-grocery/non-store channel in Belarus?
• Who are the leading retailers in Belarus?
• How is retailing performing in Belarus?
• What is the retailing environment like in Belarus?
• Which channels are winning or losing in the fight for consumers’ money?

Why Buy This Report?

• Gain competitive intelligence about market leaders
• Track key industry trends, opportunities and threats
• Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, our Retailing market research database.

Sample Analysis

Executive Summary

Belarus Faces Record Inflation
Belarus re-entered the economic crisis in 2011 and became one of the world leaders in terms of price growth. The inflation in the first half of 2011 rose to 34%, according to the Ministry of Economics. In May 2011, Belarus devalued the rouble, as the country lost a quarter of its reserves due to the negative foreign trade balance, and faced a shortage of foreign currency. On May 24th, 2011, the National Bank of Belarus (NBB) announced the devaluation of the official exchange rate of the Belarusian rouble against foreign currencies with the value of national currency decreasing by 56%. Thus, the Belarusian rouble fell to a range of currencies (Euro, US$ and Russian rouble in equal proportions) by 42% since the beginning of the year. In July, the growth of prices slowed down. The Ministry of Economics expects that inflation for the whole of 2011 will not exceed 40%.

Crisis is an Opportunity
The economic crisis affected all segments of the economy in Belarus. Leading retailers postponed their expansion plans until the currency crisis ends. Aside from the economic conditions, in 2011 the development of retailing as a whole was hampered by bureaucratic barriers, complexity of tax laws, insufficient infrastructure, and a sharp decrease in disposable incomes for the majority of the population after the devaluation of national currency. Therefore, the opportunities to purchase smaller and weaker players, that have struggled to survive in difficult trading conditions, exists, and are likely to be used by strong retailing chains.

Experts Predict Growth Of Retailing
In spite of the crisis, growth is expected in 2011, both in terms of retail turnover and the increasing numbers of outlets and selling space. The proportion of large-format sites and modern retail outlets are expected to increase. According to industry experts, in February 2011 in various stages of constructions and reconstruction, there was almost 800,000 sq m of total construction area of different retail sites in Minsk and more than 300,000 sq m in the regions. Even if not all declared facilities are introduced by the end of the year due to the crisis, the real supply of retail space is expected to rise considerably.

Grocery versus Non-grocery Split is Indicator of the Crisis
The split between grocery and non-grocery products as a percentage of total retailing current value sales in Belarus remained close to 50/50 during the review period. However, this split moved toward being in favour of grocery products during certain times of crisis in Belarus, which was in 2009 and 2011. In 2009, after single large national currency devaluation, the grocery versus non-grocery split changed to 51% against 49%, while in the pre-crisis year of 2008, the split was 50% against 51%. The same trend is expected to result from the crisis of 2011 with the share reverting back to 2009’s figures. Sharp national currency devaluation in May 2011 led consumers to reduce their spending on non-essentials goods and increase spending on essential groceries. In 2011, grocery retailers as a whole is expected to show faster growth in current value sales than non-grocery retailers, while the development of non-grocery retailers’ channels will be hampered by reduced consumer purchasing power and by restricted access to credit with high interest rates.

New Mergers and Acquisitions Expected
Despite the economic crisis, the outlook for retailing in Belarus is generally optimistic. Local retailing remains comparatively underdeveloped, leaving considerable room for potential growth. While the downturn persists and during the initial stages of economic recovery, development is likely to be characterised by a focus on grocery retailing and the expansion of modern retail formats to smaller cities and regional areas. At the same time, the ongoing privatisation of state-owned retail chains will provide further opportunities for mergers and acquisitions.

Table Of Contents

Retailing in Belarus - Industry Overview

Executive Summary
Belarus faces record inflation
Crisis is an opportunity
Experts predict growth of retailing
Grocery versus non-grocery split is indicator of the crisis
New mergers and acquisitions expected

Key Trends And Developments
Economic conditions
Government regulation
Foreign direct investment
Demographic changes
Retailers cut costs and lower prices
Impact of real estate on development of retailing

Market Indicators
Table 1 Employment in Retailing 2006-2011

Market Data
Table 2 Sales in Retailing by Category: Value 2006-2011
Table 3 Sales in Retailing by Category: % Value Growth 2006-2011
Table 4 Sales in Retailing by Grocery vs Non-Grocery 2006-2011
Table 5 Sales in Store-Based Retailing by Category: Value 2006-2011
Table 6 Sales in Store-Based Retailing by Category: % Value Growth 2006-2011
Table 7 Retailing Company Shares: % Value 2007-2011
Table 8 Retailing Brand Shares: % Value 2008-2011
Table 9 Forecast Sales in Retailing by Category: Value 2011-2016
Table 10 Forecast Sales in Retailing by Category: % Value Growth 2011-2016
Table 11 Forecast Sales in Store-Based Retailing by Category: Value 2011-2016
Table 12 Forecast Sales in Store-Based Retailing by Category: % Value Growth 2011-2016

Appendix
Operating environment
Table 13 Share of Retail Sale of Goods Sold via Markets and Trade Centres 2007-2010
Table 14 Markets and trade centres in Belarus 2005-2010
Table 15 Shopping Centres Development in Belarus 2005-2010
Table 16 The Biggest Shopping Centres in Belarus 2010
Cash and carry
Table 17 Cash and Carry Development in Belarus 2005 - 2010

Definitions

Sources
Summary 1 Research Sources

Retailing in Belarus - Company Profiles

Belkniga OAO in Retailing (Belarus)
Strategic Direction
Key Facts
Internet Strategy
Company Background
Competitive Positioning
Summary 4 Belkniga OAO: Competitive Position 2011

Belkoopsoyuz CHUP in Retailing (Belarus)
Strategic Direction
Key Facts
Internet Strategy
Company Background
Private Label
Competitive Positioning
Summary 7 Belkoopsoyuz CHUP: Competitive Position 2011

DorOrs RUP in Retailing (Belarus)
Strategic Direction
Key Facts
Internet Strategy
Company Background
Private Label
Summary 10 Dorors Rup: Private Label Portfolio
Competitive Positioning
Summary 11 DorOrs RUP: Competitive Position 2011

Pharmacia UP in Retailing (Belarus)
Strategic Direction
Key Facts
Internet Strategy
Company Background
Competitive Positioning
Summary 14 Pharmacia UP: Competitive Position 2011

Soyuzpechat' TRUP in Retailing (Belarus)
Strategic Direction
Key Facts
Company Background
Competitive Positioning
Summary 17 Soyuzpechat’ TRUP: Competitive Position 2011

Grocery Retailers in Belarus - Category Analysis

Headlines

Trends
The second wave of the economic crisis, which hit Belarus in 2011 continued to hamper the development of grocery retailers. In 2011, the current value growth rate of 24% remained marginally below the review period CAGR of 25%. The single big national currency devaluation by 53% which caused high inflation by 34% in the first half of 2011 led to the significant decline in disposable incomes of the majority of Belarusians, making them much more cautious in their spending habits.

Traditional VS Modern

Channel Formats
Chart 1 Modern Grocery Retailers: Supermarket: Preston in Minsk
Chart 2 Modern Grocery Retailers: Supermarket: Sosedi in Minsk
Chart 3 Modern Grocery Retailers: Supermarket: Sosedi in Minsk
Chart 4 Modern Grocery Retailers: Supermarket: Zavodskoy Universam in Minsk
Chart 5 Traditional Grocery Retailers: Other Grocery Retailer in Minsk
Chart 6 Traditional Grocery Retailers: Food/Drink/Tobacco Specialist Retailer Khleb in Minsk
Chart 7 Traditional Grocery Retailers: Food/Drink/Tobacco Specialist Retailer Khleb in Minsk
Chart 8 Traditional Grocery Retailers: Food/Drink/Tobacco Specialist Retailer Shtopor in Minsk
Chart 9 Traditional Grocery Retailers: Food/Drink/Tobacco Specialist Retailer VinReal in Minsk
Chart 10 Traditional Grocery Retailers: Food/Drink/Tobacco Specialist Retailer Kristall in Minsk

Competitive Landscape
Belkoopsoyuz remained the clear leader in grocery retailers in 2011 with value share of 19%. It was also the leading grocery retailer’s player in terms of outlet numbers and selling space, with shares of 36% and 31% accordingly. Its smaller share in current value sales terms reflected the fact that the majority of its outlets are found in rural towns and villages, where consumer purchasing power is lower than in big cities. Formed during Soviet times, Belkoopsoyuz is collectively owned by a total of 118 consumer societies or cooperatives. The latter are controlled by six regional unions, one for each major region of Belarus - Minsk, Gomel, Grodno, Brest, Vitebsk and Mogilev. The company’s full name is Belarusian Republican Union of Consumer Societies. In grocery retailers, it competes in supermarkets and other grocery retailers.

Prospects
The positive changes observed in grocery retailers over the review period, such as faster development of modern grocery retailers compared with traditional, further consolidation in grocery retailing and development of retail chains, more competitive services and pricing policies by the leading retail chains are expected to continue past the forecast period due to the current underdevelopment of grocery retailing compared with European standards.

Channel Data
Table 18 Sales in Grocery Retailers by Category: Value 2006-2011
Table 19 Sales in Grocery Retailers by Category: % Value Growth 2006-2011
Table 20 Grocery Retailers Company Shares: % Value 2007-2011
Table 21 Grocery Retailers Brand Shares: % Value 2008-2011
Table 22 Forecast Sales in Grocery Retailers by Category: Value 2011-2016
Table 23 Forecast Sales in Grocery Retailers by Category: % Value Growth 2011-2016

Non-Grocery Retailers in Belarus - Category Analysis

Headlines

Trends
In 2011, non-grocery retailers continued its movement towards consolidation, greater specialisation and expansion by large chains. The best examples include leading chains in electronics and appliance specialist retailers, home and garden specialist retailers, in apparel specialist retailers, as well as in jewellers and other leisure and personal goods specialist retailers. Leading companies in these segments demonstrated increased shares in value sales and outlet numbers in spite of the crisis.

Competitive Landscape
Belkoopsoyuz remained the leading non-grocery retailer in 2011 with value share of 8%. It was also the leading non-grocery retailer in terms of selling space with 16% share, and ranked third in terms of outlet numbers. Notably, Belkoopsoyuz’s share of total non-grocery retailers’ current value sales was markedly lower than its share of selling space. This was due to the fact that the majority of its outlets are found in regional towns and villages, where consumers have lower purchasing power than in big cities. Over the review period as a whole, Belkoopsoyuz witnessed its share of total non-grocery retailers’ outlet numbers and selling space decline steadily, while its share of total non-grocery retailers’ value sales declined at a lower rate. This was mainly due to the company’s decision to close unprofitable other non-grocery outlets in rural areas. Aside from other non-grocery retailers, Belkoopsoyuz also competes in department stores and home and garden specialist retailers.

Prospects
Non-grocery retailers will continue to develop positively, with constant value sales expected to grow by a CAGR of 4% and outlet numbers at a CAGR of 3%. During the early years of the forecast period, however, the development of some channels will be hampered, because the recovery from the 2011 crisis is expected to be difficult. Non-grocery retailers trading with imported goods will face difficulties until the situation with deficit of foreign currencies lasts. Non-grocery retailers operators specialising in durable goods and luxury items will be worst affected, while those that deal in necessity products and compete on a low-price platform or offer regular discounts will be better positioned to cope with reduced consumer spending. Moreover, many non-grocery retailers will have to scale back or postpone their expansion plans as economic conditions make it harder to obtain financing, particularly with increasing interest rates for credit. Some players will face additional competition from chained hypermarkets and supermarkets which will continue to expand their non-grocery assortments. Nonetheless, during the latter half of the forecast period economic recovery is expected. Most channels should see growth in constant value sales and outlet numbers increase as economic recovery boosts consumer confidence and spurs the expansion of chained operators.

Channel Formats
Chart 11 Non-Grocery Retailers: Elema in Minsk
Chart 12 Non-Grocery Retailers: Defile in Minsk
Chart 13 Non-Grocery Retailers: Mango in Minsk
Chart 14 Non-Grocery Retailers: TsUM in Minsk
Chart 15 Non-Grocery Retailers: Belita, Viteks in Minsk
Chart 16 Non-Grocery Retailers: Master records in Minsk

Channel Data
Table 24 Sales in Non-Grocery Retailers by Category: Value 2006-2011
Table 25 Sales in Non-Grocery Retailers by Category: % Value Growth 2006-2011
Table 26 Non-Grocery Retailers Company Shares: % Value 2007-2011
Table 27 Non-Grocery Retailers Brand Shares: % Value 2008-2011
Table 28 Forecast Sales in Non-Grocery Retailers by Category: Value 2011-2016
Table 29 Forecast Sales in Non-Grocery Retailers by Category: % Value Growth 2011-2016

Non-Store Retailing in Belarus - Category Analysis

Headlines

Trends
In 2011, non-store retailing grew by 21% in current value terms, albeit from a fairly low base. Taken as a whole, the category remained underdeveloped, with internet retailing and direct selling comprising the bulk of sales. Moreover, current value sales in both internet retailing and direct selling were concentrated in a relatively small number of channels. This trend was most obvious in direct selling, with beauty and personal care direct selling accounting for 93% share of total current value sales in 2011.
Table 30 Internet Shops Development in Belarus 2009 - 2011

Competitive Landscape
All of the top non-store retailing companies in Belarus in 2011 were direct selling operators. Oriflame Cosmetics IOOO was the overall leader with a value share of 25%, followed by Avon Products Inc with 8%. Both Oriflame and Avon offer their own exclusive brands that are not available from other retailers. Beauty and personal care direct selling companies also tend to launch new brands and develop new formulas for existing products each year. This strategy has helped Oriflame to maintain a dominant position in beauty and personal care direct selling since 2006. The company’s success is also attributable to its aggressive direct marketing tactics, with Oriflame consultants regularly conducting consumer surveys and promoting new products on the streets of Minsk and other big cities.

Prospects
Non-store retailing is expected to record a CAGR of 6% in constant value terms over the forecast period, as sales will recover in line with increasing consumer purchasing power. More consumers in Belarus will choose non-store retailing for the convenience and lower prices. The impact of the economic downturn should continue to make direct selling and internet retailing more attractive for consumers and retailers. At the same time, the need to reduce operating costs and improve margins will encourage more companies to develop internet retailing operations, including store-based players. For consumers, the main attraction of internet retailing services will be the opportunity to buy products at cheaper prices than in store-based retailing outlets, as well as the convenience factor. However, it is likely that the category as a whole will continue to be dominated by direct selling and internet retailing formats, with others remaining underdeveloped. A high level of fragmentation in non-store retailing is also expected.

Channel Data
Table 31 Sales in Non-Store Retailing by Category: Value 2006-2011
Table 32 Sales in Non-Store Retailing by Category: % Value Growth 2006-2011
Table 33 Non-Store Retailing Company Shares: % Value 2007-2011
Table 34 Non-Store Retailing Brand Shares: % Value 2008-2011
Table 35 Forecast Sales in Non-Store Retailing by Category: Value 2011-2016
Table 36 Forecast Sales in Non-Store Retailing by Category: % Value Growth 2011-2016