Ukrainian retail returned to work after two months of lockdown

Since May 11, malls and non-food retail shops were allowed to open in most regions of Ukraine. Some restrictions, such as retail floor space and the number of visitors, continue to apply. However, many areas of retail have been allowed to go back to their work in sales outlets. The editorial asked market experts, mall operators, and key retailers about the results of offline sales in the first week of the quarantine easing and about what can be expected shortly.
Clothing and footwear
Retailers of the Fashion segment demonstrated the very different performances of sales on the first day of restoration. According to Maxim Gavriushyn, COO of Budhouse Group, the strongest chain market players have shown the surge in sales up to 300% on the first days of work compared to the same period last year. 
“Such operators as LC Waikiki, Inditex, and some other powerful players successfully sell their products in our malls. Despite the reduction of traffic by 25%, their average check has increased by 30–40% and even more in the first days of work. Small local retails cannot boast the surge in sales, and their turnover remains at the last year level,” Gavriushyn stated in his interview. 
The shoe stores were not so lucky last week. As Sergiy Badritdinov, CEO of Intertop Ukraine, told, the company opened 76 from 143 stores in Ukraine after easing of quarantine. “Concerning the turnover, a decline of close to 40% happened compared to the week before the imposition of quarantine. The decline was even worse (50%) in comparison to the same period last year. Besides, the LFL rate from the 20th week of 2019 to the 20th week of 2020 declined by 30%,” clarified СЕО of Intertop Ukraine. 
Another top-manager of the large footwear retailer, who asked not to be named, notes in his commentary to RAU that in the first post-quarantine week, the stores mentioned above had a 30%–60% drop in sales by over the previous year. 
Сhildren's products
Children's products shops and retailers gradually resume their work. For example, the Ukrainian “Bembi” brand opened half of its stores last week. Victoria Hytruk, the owner and CEO of the company, says that traffic has declined in all regions of brand presence. “However, the average returns have remained more or less unchanged: conversion has grown from 20% to 30%. Recently, people went to a mall for a walk. Now, it’s more about targeted shopping when people go out for specific goods. Due to the catch-up demand, the average check is also up from ₴350 to ₴ 500 compared to 2019,” clarifies Victoria.
The Antoshka retailer recognizes the essential difference in sales compared to last year’s figures.  “Most stores in malls demonstrates a loss of sales from 20% to 70%. However, some of them has reached last year’s level. We hope to save this positive trend, and the shops with losses will be able to achieve the previous level of turnover,” Ivan Chivkin, COO and Development Director of the retailer, says. 
He also notes that street-retailers are in a better situation, but they are still far from previous figures. Antoshka’s street turnover was 10%–20% lower than in the same period of last year. “New week promises to be no less important and interesting. It will reveal whether the last-week surge of sales was occasional and what trends we should expect,” Chivkin thinks. 
Household appliance and electronics
Household appliance and electronics retailers surprisingly positively report the results of their work in the first week following lifting the quarantine. The press office of Eldorado informed us that the retailer’s sales rose by 25% in the first week of lifting the drastic quarantine measures compared to the previous week. However, the company doesn’t articulate the dynamics of sales compared to the same period of last year. It just notes that TVs, computers, laptops, breadmakers, food processors, and electric grills enjoy far higher demand this year. 
The press office of Foxtrot, another large Ukrainian household appliance, and electronics retailer claims that the turnover’s growth via both offline and online sales channels was 23% last week compared to the last week of tough quarantine. It reached 33% as opposed to the same period of 2019. Allo, the multichannel retailer, reveals positive dynamics. Its sales have increased by 2% and 8% compared with last week and with the same period last year, respectively.
Danish homeware retailer JYSK also records positive trends. As Yevgen Ivanitsa, CEO of JYSK in Ukraine, says, the growth of revenue in the stores is higher than pre-coronavirus results. “The compared shops increase their sales by 120% and the retailer features over 140% growth annually,” Ivanitsa assures.
At the same time, according to his words, we should consider that the records for just a week are not fully representative.  
Other retail’s segments
The jewelry market operators cannot boast turnover growth. As Ukrgold told, that the fall in turnover of jewelry is estimated to be 70%. “There are a few people in malls. The psychological barrier of visiting crowded public areas still works. Closed cinemas and entertaining areas in malls also adversely affect turnover. We hope to see growth in the coming months. We think that less amount of quarantine restrictions, permission for public transportation to work and economic recovery will improve the situation”, Grygoriy Kurnosov, CEO of Ukrgold, says. 
The chain store Agromat specializes in ceramic tiles and plumbing trade. It sold 7% fewer items compared to a week before quarantine and 10% less as opposed to the same period of last year.
Food retailers traded evenly compared with the previous week. This is not surprising since they continued to operate in normal mode despite the quarantine, i.e. without restrictions but increased security measures. However, their sales could hardly reach last-year records. Earlier, Taisia Lytovchenko, CEO of Retail & Development Advisor, told that some food stores located in malls or far from the residential areas suffered from the decreased turnover in the range of 15%–70% at the beginning of quarantine period. 
According to the source in a large chain of near-the-house stores, the easing of quarantine didn’t significantly improve the situation. “The sales grew a little since people started getting out of the houses and going to work. However, the positive trend is not essential. The number of checks represents a 5% increase in Kyiv compared to the tough quarantine period. We expect more intensive growth after a full start of public transport,” the interviewee claims. 
Traffic collapse in malls
It is worth mentioning that malls, which have resumed work, report the essential decrease in traffic. As Maxim Gavriushyn, COO of Budhouse Group and the head of the Board of Ukrainian malls, says, the attendance of malls in the first days of the restart was 25%–50% lower than during the pre-quarantine period. 
Roxolana Pyrtko, a top-manager of malls “Spartak” and “Roxolana” in Lviv, confirms that. She says, that the enrolment of the company’s facilities has been halved. The turnover has suffered a decline of over 30%, and the level of vacancy increased by 10%. “It’s not good, but we see some positive trends. Potential clients are coming forward, an inspection of premises takes place, and the attendance of malls grows with time,” Pyrtko notes. 
The Arricano Company that has opened City Mall in Zaporizhya and Sunny Gallery in Kryvyi Rig, don’t reveal its digital records but claim the fast-growing attendance. “we see the essential increase of traffic in the first days of malls’ work, and the performance is rapidly getting close to pre-quarantine period. Besides, several product categories have already demonstrated a high level of last-year sales. This confirms our predictions concerning the catch-up demand,” Anna Chubotina, CEO of Arricano, states.
The “Hollywood” mall in Chernigiv is in the same situation. Decent attendance might be connected with low records of sick people in the region and successful advertisement campaign with the slogan “Safety and discounts are at max”. Besides, “Hollywood” is the only large mall in this region. The Development Director Maryna Reiko comments on the situation in this way: “Of course, it was feared that the customers wouldn’t come because of either coronavirus or precarious financial situation. However, traffic falling is just 10% compared to the same period last year.” 
The DCH Infrastructure & Real Estate Company that manages “Karavan” malls in Kyiv, Kharkiv, and Dnipro also notes the daily traffic growth. “Due to the catch-up demand and active lives, malls have met the target just 18%–20% lower than in this period last year. We consider the result to be decent under the quarantine fears of the society and the purchasers’ reduced revenues,” the press-service of DCH IRE has claimed. 
However, the experts think that we can hardly count on the pre-quarantine traffic and sales. The consulting company Retail & Development Advisor is sure that the current positive trend in turnover of some retailers results primarily from the factor of the catch-up demand. “The consumers are still afraid of visiting malls, and, besides, they prefer to save money under quarantine and аn uncertain future,” Taisia Lytovchenko says. 
She also states that it takes at least a year to rebound the sales up to the pre-quarantine level. Besides, it’s possible only if the second wave of a pandemic doesn’t lead to the new strict quarantine. The expert is also sure that the developers have to lower the rent and provide the renters with the discounts. Otherwise, the retailers will have to close their stores, and the malls will face high vacancy rates.