OREANDA-NEWS. December 03, 2008. The survey has been performed regularly in European countries and in the US since 1998. The 2008 survey was conducted in Ireland, the UK, the Netherlands, Belgium, Germany, Switzerland, France, Spain, Portugal, Italy, Turkey, Czech Republic, Slovakia, Romania, South Africa, Russia and Ukraine, reported the press-centre of  Deloitte.

Russia participated in the survey for the third consecutive year. Surveying activities were carried out in early October 2008, using a sample which included 800 people, living in 6 different Russian cities (Moscow, St.-Petersburg, Novosibirsk, Nizhny Novgorod, Rostov-on-Don, and Yekaterinburg), aged between 18 and 65.

The survey was conducted in early October, when the economic crisis had had a significant effect in certain areas of the globe, while in Russia it was only in the early stages of being discussed by the government and business community and in the mass media. However, the decline in economic indexes and oil prices, the US mortgage crisis and the bankruptcy of some financial institutions had all failed to make an impact on people's optimistic view of their personal financial situation, the general state of the country’s economy and year-end holiday spending. It is evident that, at the survey date, the financial crisis had had no significant impact on the majority of the population.

Economic estimates
At the time of the survey, about 70% of Russian respondents felt that the financial crisis had not impacted on their personal financial situation, while in the European countries reviewed, an average of 40-60% of respondents had already felt the first signs of an unstable economy.

Approximately 75% of Europeans said that the economy of their country was in recession, whereas 38% of Russians described the economic situation as stable and 16% of Russians said that the economy was growing.

Respondents from Russia were also optimistic, with regards to the economic outlook for 2009: 26% of respondents expected the economy to improve in 2009 and 35% expected it to remain stable. European consumers, especially in western Europe, had a pessimistic outlook for their countries: an average of about 50% of respondents expected the economy to deteriorate.

The crisis and holiday spending plans
Despite a slight decrease in estimates of personal purchasing power, compared with the same time last year, the majority of Russians expected to have the same amount to spend as last year (46%), and some expected to have more to spend (21%). Even if the overall budget is to be reduced, Russian consumers would rather reduce their spending on food and drink, than on gifts for their relatives and friends, while most Europeans plan to reconsider their spending on gifts.

"Will the bad news affect the mood of Russians in the last two weeks of December, when they are traditionally involved in doing things, which take disorganized Western Europeans a couple of months to do? This is highly intriguing for manufacturers and sellers of consumer goods, in the coming high season," says Alexander Dorofeyev, Deloitte Partner and Leader of the CIS Consumer Sector and Transport Group. "However, business is facing difficult times. Given a number of uncertainties, caused by the situation on global financial markets, retailers can only hope for a New Year miracle with continued growth in the purchasing power of Russians, as has been recorded by our recent annual surveys."

Holiday spending
The average amount of money Russians allocate for their festive budget includes spending on food, gifts and entertainment of EUR 537, some 12% higher than the previous year’s data. In terms of holiday spending, Russia was alongside such countries as France, Belgium and Switzerland, leaving Germany and the Netherlands far behind. Our neighbors in Ukraine are willing to spend less than half as much as consumers in Russia with EUR 235. Santa’s little helpers from Ireland continue to be the survey’s leading spendthrifts, with an average of EUR 1355 for each adult customer.

In contrast to the majority of European countries, where consumers plan to cut their holiday budgets for both food and gifts, Russians plan to spend more. However, the behavior of the Russian consumer differs from other Europeans, as to where money is spent. Whereas Europeans mostly prefer not to save on treats for themselves and will cut the share spent on gifts, in Russia by contrast, spending on gifts for friends and family members grows faster, by some 16%. Consumers in Russia will not be spending any more on entertainment than last year; expected spending in this area didn’t change.

"The survey’s results show that the New Year is more important for consumers than any crisis. If the estimates are played out, then retailers will face another problem: how to keep shelves stocked and not lose the opportunity to justify expenses for real estate and regional expansion, which took place over the previous year,” comments Egor Metelkin, Deloitte Partner, CIS Retail Group Leader.

Choosing gifts
More than half of Europeans do their Christmas shopping during sales or discount periods, which take place during the year, directly prior to the holiday season. This practice is increasing in western Europe, where more than 40% of respondents said that they use this opportunity. Consumers in Russia usually start to think of their gift shopping near to the middle of December and buy gifts, for the most part, during the last week before the holiday season. This explains why, at the time the survey was conducted, Russian respondents said that they hadn’t yet bought 90% of their gifts and would do so just prior to the New Year.

The most desirable gift for Russians at the New Year is cash or its equivalent in gift vouchers (desired by 36% of respondents). This wish was repeated by residents of large countries in continental Europe, such as Germany and France. The number of Russians, wishing to receive cash as a gift has only increased in the last year: 36% against 28% last year.

Cosmetics and perfumes rank second and third place in the wish-list was taken by clothes and shoes, which climbed up from fifth place last year.  Books continue to be desirable for only 11% of Russians (ranked eighth), whereas in six of the seventeen countries, covered by the survey, books lead the list of desirable gifts.

Desires differ from reality the most, with regards to two segments in particular: cash (the desire to receive a cash gift is considerably higher than the intention to make such a gift – 36% against 19%) and food (the desire to receive sweets, or a bottle of Champagne, is much less than the number of people willing to make such a gift – 12% against 28%). Travel as a Christmas gift is still a dream for 16% of Russians that won’t come true again this year, since the number of people who plan to make a gift of it only amounted to 4% of respondents.

When considering gifts for teenagers under the age of 18, Russians, like many other people in western Europe, are puzzled over what best to choose and mostly give cash as a gift (11% of respondents). Another popular choice is mobile phones (9%), although they have lost the absolute leadership among gifts for teenagers they had last year.

Shopping locations and selection criteria
Russians prefer to buy their food in hypermarkets (46%) or chain supermarkets (20%), since these outlets fully meet the main shopping location selection criteria: value for money (73%) and range of products (54%).

Russians tend to buy presents primarily in hypermarkets (59%), with second place given to specialized shops (38%), and the third place given priority being markets (33%).

These statistics, therefore confirm the general practice of attraction to new sales patterns. However the predominance of big format shopping continues to strengthen its position.

Shopping via the Internet
When Russians were asked, whether they were going to use the Internet for their festive shopping, 90% responded negatively. Russian consumers continue to largely ignore the Internet as one of the major trading channels in the modern world, especially during the pre-holiday period. It is worth noting that the main reason Russians ignore Internet shopping is their desire to see a product themselves, to hold it in their hands and not just to look at a picture of it on a website (42% of respondents provided such a response).

The uneasiness of Russian consumers, regarding using the Internet to do their shopping, can be explained, not only by the absence of a computer or Internet access, but for the most part by psychological factors. These include, on the one hand, the low credibility value of the Internet, as a technique for doing shopping, while on the other, the ingrained culture of shopping itself, which implies visiting a shop and selecting a product personally. If Russians buy presents via the Internet, these will mostly include perfumes and cosmetics, while in the majority of European countries, the products, most frequently bought via virtual shops, are books.