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. Last Updated: 07/27/2016

Holidays A Gift for Crisis-Hit Retailers

On the first working day after New Year's, the biggest gift-giving day of the year, stores in Moscow said the financial crisis did nothing to dampen the annual shopping spree. Muscovites raced to buy everything from cheap souvenirs to cars.

"Crisis?! People just all went crazy! Some of Moscow's car dealers ran out of cars. Jewelry shop sales assistants were on their last legs by Dec. 31. And overall sales were huge," an official from the city department of consumer market and services said.

Executives at Moscow shopping centers GUM and TsUM and the Moskva department store said that sales were high and the level of demand often exceeded expectations.

"For the couple of days before New Year's our sales actually doubled our already increased pre-holiday expectations," said Nina Yakusheva of the TsUM marketing department.

Shoppers, she said, were eagerly snapping up presents. "Oh, they were buying everything - cosmetics, small items of clothing like gloves, scarves and ties, or towels and bed linen sets," she said. Linens have been a traditional present since Soviet times when they were difficult to find.

The multitude of mini shopping arcades in underground passages around the city also saw a brisk business this holiday season.

"In the last days of the year the number of customers quadrupled," said a sales assistant at one of the kiosks in the underground passageway at Pushkin Square, who gave her name as Alla.

"They were buying everything. Especially popular were cheap little things like pens or wallets, which obviously were presents," she said.

However, the shopping bonanza in Moscow was not limited to socks and other little presents for relatives and friends. Many people splashed out much larger sums and bought cars.

Car dealers said the last week of the year brought lines of eager customers.

"Some of them did not even manage to get in," a cheery telephone operator replied at the TorgMash car dealership.

High sales also were reported at the Avtomir showroom in southwest Moscow.

The dealership offers a range of cars from Russian-made Ladas for around $3000 to Daewoo, Renault and Skoda cars at prices three times as much and higher.

Alexei Shkolin, the chief Avtomir salesman, said the flow of customers increased tremendously in the last few days of 1998. The demand was high, he said, for all cars - cheap ones and more expensive ones, too.

Shkolin also noted that most of the purchases were made with the U.S. dollars, rather than rubles.

"That was money obviously pulled out from mattresses," he said.

Shkolin noted, however, that what appeared to be a sales boom was merely what his dealership used to see before the Aug. 17 ruble devaluation and banking collapse.

"We used to get that many customers before," Shkolin sighed.

What's more, the sudden increase in car sales was probably triggered not by the New Year's spirit but by other factors that threaten to dampen sales in the future.

Among the possible factors motivating last week's eager shoppers, Shkolin said, was the approaching introduction of a new law in January requiring that all big-ticket purchases be reported to the State Tax Service. Purchasers of cars, jewelry and other expensive items will then have to explain where they got the money.

Some car buyers may also be worried about the possible introduction of a regional 5 percent sales tax, as provided for under the new tax legislation, or that VAZ, a major Russian automobile producer, will raise prices from the current low levels.

Vadim Shishov, the president of Rus Torgovaya, the guild of directors and owners of trading enterprises, said the holiday sales boom only came as a surprise because traders had underestimated people's personal wealth.

"People still have money," Shishov said, noting that sales went up mostly in relatively rich Moscow rather than in the poorer regions.

Many people, in fact, had money to spend precisely because they had cut their expenses after the economic crisis hit in August, he said

"People started to spend less, but then for how long can one exist economizing all the time?" Shishov said.

Muscovites on the street confirmed that the hard economic times made at least some of them more generous to themselves and their relatives during the holidays.

"Yes, I did buy a lot of presents this year. They were small, but I thought there should be at least a little bit of joy in life," said a pensioner, who gave her name as Marina Afanasyevna.