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. Last Updated: 07/27/2016

Food, Beverage Industry Still Reeling From Crisis

The Soviet days of uninviting shops with almost empty shelves and little choice for consumers are long gone, exhibitors said Tuesday at the opening of the two-day Retail and Distribution 2000 food and beverage convention.

Igor Kachalov, president of the marketing research agency Kachalov & Associates, said the nation’s shops are well stocked with goods and services.

However, despite the variety of goods, the national market for food and beverages this year is expected to come in at just $70 billion to $80 billion, a paltry figure compared to the $60 billion annual turnover of Europe’s largest supermarket chain Metro, Kachalov said.

Alexandra Lobova, a partner in auditors Ernst & Young, and the chairwoman of the convention, said national sales this year will still be 20 percent to 30 percent down from before the 1998 financial crisis.

Still sectors like cereals, meat and meat products, alcohol and nonalcoholic beverages and milk and dairy products are experiencing rapid growth, she said.

Such growth is a good sign of a strengthening economy, since the average Russian family spends more than 60 percent of its income on food and beverages, Kachalov said, citing recent surveys.

Lobova said the average family buys such goods almost every day and visits about five different retail stores a week.

She added that despite the relatively low volume of the market, businesses should not just sit on their hands and should not relax — the market has plenty of surprises to offer.

Retail and Distribution 2000, which is taking place at the Renaissance Hotel, is organized by the magazine Vitrina, a publication of The Moscow Times’ parent company Independent Media. About 30 local and foreign companies active in the food and beverage market are attending the convention.

Apart from food, alcohol and nonalcoholic beverage retailers hawking their wares, other companies are offering management systems, retail equipment, security systems and consulting and information services.