Sberbank CIB News

Sberbank CIB Ivanov Consumer Confidence Tracker Update

31.01.2018

Sberbank Investment Research today publishes its 22-nd survey of the pan-Russian consumer, the Sberbank CIB Ivanov Consumer Confidence Tracker, which monitors consumer spending, savings and confidence trends across the country.

This Ivanov Consumer Confidence Tracker showed an improvement in the consumer confidence index from -12% in 3Q17 to -10% in 4Q17, finally recovering to the pre-downturn 2H13 level. Consumer shopping habits continue to normalize, despite still-high trading down.

Ivanov Consumer Confidence Tracker


Source: Cint, Sberbank CIB Investment Research.

We give the main findings of our survey below:

  • There were Q-o-Q improvements in perceptions of personal wealth and the conditions for big ticket purchases, while country wealth perceptions were unchanged. We think the somewhat brighter sentiment reflects a pickup in real incomes in 4Q17 amid record-low inflation. We have been pleased by the gradual improvement across various metrics. This tells us that the improvement should be sustainable, unlike previous spikes that were followed by disappointment.
  • The unemployment rate among our respondents dropped from 11.6% in 4Q16 to 10.9% last quarter, but increased by 30 bps on a Q-o-Q basis. Underemployment (the share of those employed part-time but willing to work full-time) reached a record high of 9.7%, up from 8.2% in 3Q17 and 8.1% a year earlier. The net hiring index came in at 35.0%, versus 33.5% in 3Q17 (due to seasonal factors) and 42.0% in 4Q16.
  • Our survey indicates that wages rose by 4.9% y-o-y in 4Q17, below the 7.9% growth that the State Statistic Service recorded. The Ivanovs plan to spend any wage increases on food (20%, while 39% of incomes are currently spent on food), clothing and household goods (15%, with 16% currently spent on the category) and savings (13%, just 7% saved currently). The savings ratio was flat Q-o-Q at 6.5% (versus 7.0% a year ago).
  • The share of those who sought to save on staples over the previous 2-3 months (i.e. curbing impulse purchases and switching to cheaper food items) was flat y-o-y and down 3 pp Q-o-Q at 65%, the lowest level since 2014. The importance of prices in shoppers’ decision-making has declined, narrowing the gap with quality, which has become a more important factor. Around 51% of respondents were ready to trade up for higher quality at a fair price. Hence, promotions on more expensive items could be justified. The share of “promo-addicted” Ivanovs dropped further, moving from 62% in 3Q17 to 60% in 4Q17. In line with the ease in caution with regard to food spending, the share of customers trying to save on non-food items decreased.
  • In terms of the population’s concerns, the overall picture did not change much last quarter. Corruption (cited by 64% of respondents), unemployment (55%) and inflation (48%) remained the three top concerns of the population. The latter was despite the record-low officially reported inflation of 2.6%. Only 18% of respondents were troubled by the ruble exchange rate, in line with the previous survey.
  • Some 55% of Ivanovs indicated a willingness to pay more if groceries were to become more expensive. The share for convenience store visitors was lower than for hypermarket customers. Meanwhile, there was a higher share of big box shoppers inclined to switch to higher-quality products.

This proprietary publication includes a headline consumer confidence index and also provides a set of leading indicators for the most important trends in the country’s rapidly expanding consumer sectors (retail, banking, telecoms, media, IT, real estate and transportation).

The survey is undertaken by market research agency Cint on behalf of Sberbank CIB and is now conducted quarterly under a methodology that closely mirrors that of the State Statistics Service’s quarterly survey and EU confidence assessments. However, our survey is expanded to encompass a wider set of questions relevant to Russia’s middle-income consumers. The survey sample is 2,300 people aged 18 to 65 and living in 164 cities with a population of over 100,000 inhabitants. The tracking error is below 2%.

Sberbank is Russia’s largest bank and a leading global financial institution. Sberbank holds almost one third of aggregate Russian banking sector assets, it is the key lender to the national economy and the biggest deposit taker in Russia. The Central Bank of the Russian Federation is the founder and principal shareholder of Sberbank owning 50% of the Bank's authorized capital plus one voting share, with the remaining 50% held by domestic and international investors. Sberbank has more than 145 million customers in 21 countries. Sberbank has the largest distribution network in Russia with almost 15,000 branches, and its international operations include UK, US, CIS, Central and Eastern Europe, India, China, Turkey and other countries.

The Bank holds the general banking license No.1481 issued by the Bank of Russia. Official websites of the Bank: www.sberbank.com (Sberbank Group website), www.sberbank.ru.

Sberbank CIB

Sberbank CIB1 is the corporate and investment banking business of Sberbank. Its key areas of activity are corporate finance (including trade finance), the documentary business2, investment banking services, trade operations with securities, and private equity. Sberbank’s corporate and investment banking business provides integrated financial solutions and investment advisory services to its clients, which include major corporations, financial institutions, sovereign states and federal and sub-federal government bodies and organisations.

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1 On the basis of JSC “Sberbank CIB” and Sberbank.
2 Banking products and services provided by Sberbank.