Analysis of the Russian retail sector

Abstract

PurposeThe paper aims at providing a contemporary analysis of Russia's developing retail sector. Of special interest is the internationalization of this market through cross‐border mergers and acquisitions (M&A). This is done by identifying major trends in this sector and providing projections concerning forthcoming acquisition activity.Design/methodology/approachThe paper builds primarily on second‐hand data. In addition to the analysis of macro‐economic indicators, the paper also provides three case‐based analyses of leading firms in the Russian market.FindingsPrevious research has shown that the retail industry is gradually saturating and further growth is sought through acquisitions and expanding into emerging markets. As the findings shows, Russia's two largest cities represent basically the driver of the economy, and constitute the platform for the growth of modern retail concepts. The Russian retail sector is currently experiencing gradual internal restructuring, and leading retailers have started to carry out domestic acquisitions and become listed in the stock exchanges. Furthermore, cross‐border M&A statistics show that Central and Eastern European (CEE) countries have been attractive targets for cross‐border M&A, while Russia is still following behind.Practical implicationsThe paper presents recent data and related insights for global retailers planning expansion to the Russian market. Findings suggest that it will take approximately 3‐5 years until the market is developed enough for the global retail business.Originality/valueThe paper is a seminal study of Russia's retail sector and related M&A prospects, and can be considered a valuable platform for further empirical research in this field.