Ahead Of New Year, Russian Shoppers Hit Malls

People walk in Moscow's Red Square decorated for New Year's i i

hide captionPeople walk in Moscow's Red Square, which is decorated for one of the biggest holidays of the year: New Year's. Russian retailers expect to bring in about 15 percent of their annual take over the New Year's period.

Mikhail Metzel/AP
People walk in Moscow's Red Square decorated for New Year's

People walk in Moscow's Red Square, which is decorated for one of the biggest holidays of the year: New Year's. Russian retailers expect to bring in about 15 percent of their annual take over the New Year's period.

Mikhail Metzel/AP

New Year's Eve in Russia is about more than seeing out the old year and seeing in the new one — it's the main family holiday, traditionally involving a lavish dinner and the giving of gifts.

But while Russians may shop on a different holiday schedule, for a growing number of people in the country, the experience is identical to that of millions of Americans. People in big cities such as Moscow flock to vast indoor malls where Western chain outlets like Adidas, The Body Shop and IKEA sit alongside domestic stores such as Detsky Mir — Children's World — the former Soviet toy store.

Vladimir Romanenko, a company manager, is buying gifts for his family at a huge mall next to Kiev Station in central Moscow, with five stories of shopping and an indoor parking lot. He has bought a ring for his wife, an iPod Nano for his daughter and other gifts. The bill: around $800.

"It is very important that my woman or children, they know that I love them," Romanenko says. "They are not waiting for very expensive gifts."

Natasha Zagvozdina, the head retail sector analyst for Renaissance Capital investment bank, says it's important for families to gather together on New Year's Eve and drink champagne when the Kremlin clock chimes midnight.

"Every single Russian will exchange gifts," she says. "It's a big celebration, plenty of gifts being exchanged — we do take it seriously. It's one of the traditions that never went away, even in the Soviet times."

The decade-long building boom that followed the collapse of communism may have stalled during the global economic crisis, but Zagvozdina says the malls that have sprung up, especially in Moscow, are changing the way Russians shop.

"Some people can spend three, four, five hours in a shopping mall, especially if it has an ice rink, a movie theater and a handful of good chain restaurants," she says. "It is changing the shopping habits."

Russian retailers expect to bring in about 15 percent of their annual take over the New Year's period. It has been a tough year-and-a-half for the Russian economy, but now many Russians — particularly those in the middle class that has grown up in the past decade — feel they have overcome the financial crisis. Most of the shoppers interviewed said they hadn't cut their spending this year.

Roman Perekov, who works in the brewing industry, shopped at the Yevropeisky mall before flying to Siberia. He bought toys for his son, a mobile phone and women's accessories for his wife, and a ski suit for himself.

"I spent something around maybe $2,000 ... for all gifts," Perekov says, chuckling. "Of course, it's a big amount, but I planned it. Therefore, I don't have a feeling that I cut my budget crucially."

Most Russians' budgets don't come anywhere near Perekov's — the average wage is about $600 a month — but spending this December is up on 2008, and retailers will be joining other Russians in celebrating a happy new year.

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