Alla Barinova, Manager Moscow, Bord Bia – Irish Food Board
After the crisis that occurred in Ukraine in 2014, due mostly to political reasons and loss of their main trade partner : Russian Federation, the Ukrainian economy has been slowly stabilizing. Ukrainian economists tend to believe that their GDP will experience a 3% growth in the coming years and project that they will reach pre-crisis levels in 2020-2021. With the increase in GDP of the population, people would have more money to spend on food, which could lead to expansion of the retail market.
Despite the predicted growth of retail market, it is important to say that Kiev and Kiev Oblast play a general role in the whole Ukrainian retail market. Retail sales in this region account to one third of the total retail sales of all country. This should not be surprising, especially if we consider the fact that average income of household in Kiev is three times higher than average income in other regions. Therefore Kiev and Kiev Oblast should be the main focus and attraction for the possible retail expansion for foreign countries.
One of the trends occurring in the recent years in Ukraine is that people tend to choose to go and buy food in big supermarkets rather than in the small grocery stores, not just because of the price factor, but also because Supermarkets in Ukraine, especially in the area of Kiev, tend to have modern infrastructures, convenient locations and nice personnel. Some of the grocery chains tend to survive by investing in the expansion of their chains and making grocery stores larger with higher variety of food options. Graph represented below is the questionnaire created based on the response that random residents of Kiev gave to the question "Where do they prefer to go food shopping?"
Retail market in Ukraine has a potential to grow as economy of the country grows. Hence there is a potential for foreign investment, especially in alcohol drinks, dairy products and fish. I will cover these food items in my next food alert articles.