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Retail Market Developing at Fast Pace

Published: March 6, 2007 (Issue # 1251)



  • Customers walk through one of the two IKEA stores already opened in St. Petersburg.
    Photo: Alexander Belenky / The St. Petersburg Times

St. Petersburgs retail market today is one of Russias most dynamic. Growing personal incomes coupled with a lack of quality shopping space in the city mean that developers and retail chain operators, both Russian and international, are actively trying to establish their presence on the countrys second biggest market.

However, for a city of 4.6 million inhabitants, St. Petersburgs quality market remains very small and is currently at a very early stage of its development. In mid-2006 the total area of the citys international-standard shopping centers (i.e. at least 5,000 square meters in size, with a quality selection of tenants and managed as a single project) was only 370,000 square meters, while vacancies there were very low. In addition to that, street retail along the citys main shopping corridors (Nevsky Prospekt, Bolshoi Prospekt, Ligovsky Prospekt and Sadovaya Ulitsa) is currently at 21,000 square meters.

This means that in todays St. Petersburg there is only 80 square meters of quality retail space per 1,000 inhabitants this is one of the lowest figures in Europe. For comparison, Warsaw has 600 square meters, Madrid 300 square meters and Berlin 350 square meters. By the amount of quality retail space per 1,000 inhabitants St. Petersburg is not only behind Moscow with 120 square meters, but Samara and Kazan as well and is now on the same level as the majority of other cities with a population of 1 million or more, such as Yekaterinburg, Nizhny Novgorod or Volgograd. Taking the citys size and importance into account, it becomes obvious that St. Petersburg has a huge, yet unrealized, retail market development potential.

Like in any other city, the retail space on offer in St. Petersburg is not limited to shopping malls and boutiques on main shopping streets. The entire market, which also includes open-air marketplaces, kiosks, neighborhood grocery stores and pavilions, is estimated at 4 million square meters. As the city develops and local consumers become more discerning, demanding better service and a better choice of quality retail, the share of sub-standard properties will decrease. In terms of the sophistication of its shopping centers and the overall development of the market, St. Petersburg is now three to five years behind Moscow, but is quickly closing the gap and the situation is likely to change dramatically in the next 1 1/2 to 2 years.

A number of large-scale Western-standard shopping center projects currently under development some of these concepts are not present in Moscow yet will make St. Petersburg one of the retail capitals of Russia. According to our estimates, by late 2008 the amount of quality shopping center space in the city may reach about 1.4 million square meters (compared with 2.7 million square meters that Moscow is scheduled to have in two years).

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ALL ABOUT TOWN

Thursday, Oct. 2


The celebration of the bicentennial of the birth of Mikhail Lermontov continues with todays free exhibition in the citys Lermontov Library at 19 Liteiny Prospekt. Titled Under the Rustling Wings, the temporary exhibition will feature the costumes and scenery used in the 1917 production of Lermontovs play The Masquerade, which he wrote in 1835 when he was only 21 years old.



Friday, Oct. 3


Learn more about how to manage and evaluate employee performance during SPIBAs Human Resources Committee meeting this morning on Employee Assessment: Global and Local Trends. Starting at 9:30 a.m., the discussion will touch on such topics as the partnership between HR and business, reliable assessment strategies and more, with Tatiana Andrianova, the head of the SHL Russia and CIS branch in St. Petersburg, as the featured guest. Confirm your participation by Oct. 2 by emailing office@spiba.ru or calling 325 9091.


AmChams Procurement Committee Meeting is at 9 a.m. this morning in their office in the New St. Isaac Office Center on Ulitsa Yakubovicha.



Saturday, Oct. 4


Wine and cheese lovers will get their chance to revel during Scandinavia Country Club and Spas Wine Market Weekend. Going on today and tomorrow, wining diners can listen to live music, take part in culinary classes and, of course, sample a variety of fine wines from around the world. The cost of admission is 400 rubles ($10.30) for adults and 200 rubles ($5.15) for children.



Sunday, Oct. 5


Look for the latest fall fashions at the Autumn Market today in Freedom Anticafe at 7 Kazanskaya Ulitsa. The minimarket plans to offer clothes more flattering than the puffy jackets that are a staple of the citys cold-weather fashion, while offering the same amount of protection from the biting winds blowing off of the Baltic.



Monday, Oct. 6


SKA St. Petersburg, the citys KHL affiliate, welcomes Slovakian club HC Slovan in a match-up tonight at the Ice Palace near the Prospekt Bolshevikov metro station. The puck drops at 7:30 p.m. and tickets can be purchased on the clubs website or in person at either the arenas box office or the clubs merchandise store on Nevsky Prospekt.



Tuesday, Oct. 7


Learn more about Russias energy industry at the St. Petersburg Energy Forum that begins today and runs through Oct. 10. Attracting industry experts and political and business representatives, the forum plans to welcome more than 350 plus companies and their representatives to discuss the future of Russias largest economic sector.



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