The form of competition for consumer goods companies changes radically as western retailers flood into the Russian market. Western retailers also introduce and enforce their global business models, which squeeze the margins of consumer goods companies.
This trend is already apparent in central and eastern Europe. By 2011 the total supply of modern retail space had reached 3,642m sq m and the total number of shopping centres was 111.
Moscow has a population of at least 8 m with an income per head of almost $6,000 (almost five times higher than St Petersburg). Muscovites spend 45% of their income on food and alcohol, 20% on other non-food consumer products, 16% on shoes and clothing, 5% on electronics, 3% on public transport and just 4% on housing and 1% on education. The proportion of retail spending is significantly higher than in other European cities. Currently, just one-third of retail spending is in"normal" shops and supermarkets; outdoor markets and kiosks account for the remaining two-thirds.
Players such as Metro, a wholesaler, Spar and Av A, both retailers, have monitored the success of IKEA, a Swedish home furnishings chain. After just two years in business, the first IKEA store in Moscow accounts for 11% of IKEA'S global sales.