Russians are increasingly cutting back on food purchases as rising prices outpace income growth, signaling a concerning trend for the nation’s economy. Data reveals a slowdown in food sales, indicating a shift in consumer behavior towards minimizing expenses and prioritizing essential needs.

The growth in food sales has significantly slowed down, increasing only 2.1% in the first quarter compared to 6.8% in the same period last year. This slowdown is primarily attributed to a substantial increase in prices that is outpacing the growth of incomes.

The real purchasing power of the population is declining, with inflation exceeding 10% in April and food inflation reaching almost 12.7%. This inflationary pressure is forcing people to save on everyday expenses, even on traditionally stable food items like chips, cream, seafood, and ready-made salads.

Consumers are increasingly minimizing spending by opting for discounted or promotional items and postponing large purchases. This behavior reflects a structural shift in consumer habits driven by expectations of further price increases, with over 60% of Russians anticipating continued inflation.

Officially, product prices have increased by more than 12%, but in reality, some categories have seen increases of 20-30%. This discrepancy is acutely felt by consumers, especially as income indexation for public sector employees and pensioners fails to keep pace with rising costs.

The decrease in food sales is a critical indicator that cannot be ignored, as it signifies that Russians are starting to save on essential consumer goods. This shift impacts retail trade and slows down domestic demand, which is a key driver of economic recovery.

Experts suggest that authorities should consider regulating trade markups on domestic products to curb rising prices. The current high key rate is seen as inadvertently supporting retail chains that impose significant markups on food products. Furthermore, the focus on cheaper, lower-quality products raises concerns about the negative impact on public health.