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Back-to-school Expenditure Drops an Average of 25% Across Russia

With record numbers starting school, Russian families have cut back-to-school spending back to the basics.

Photo: Is there a lesson to be learnt from Russia’s back-to-school spending patterns? (Shutterstock.com)
Is there a lesson to be learnt from Russia's back-to-school spending patterns?
Photo: Is there a lesson to be learnt from Russia’s back-to-school spending patterns? (Shutterstock.com)
Is there a lesson to be learnt from Russia's back-to-school spending patterns?

This year, the first day of September not only marked the beginning of the school year in all of the former Soviet states, it also provided a benchmark for overall consumer confidence within Russia itself. In fact, the level of back-to-school expenditure is seen as a key indicator of the current health of the Russian economy.

This year is particularly significant in that it represents the coming of school age for a generation of children born while Russia's economy was burgeoning, the so-called 'thick years', a time when the country's consumer market was growing at a two-digit annual pace. With birth rates peaking during this period, this year has seen 1.6 million Russian children going to school for the first time. This represents an all-time high in the post-Soviet era.

Back in 2012, Sberbank, the largest bank in Russia and Eastern Europe, introduced the Ivanov Consumer Confidence Tracker. Taking its title from the most common Russian surname, this quarterly survey monitors consumer spending, savings and confidence trends across the country.

According to its latest findings, the typical Russian family cut its back-to-school expenditure by 25% this year when compared to 2015. The average spend was US$220, though there was some variance from region to region. The overall downward trend, however, was clearly evident across the country, with a similar percentage drop seen from St Petersburg to Vladivostok, with both rural and areas affected, as well as Muslim and Slavic communities.

A closer examination of the back-to-school shopping basket shows that the typical family cut back on almost everything, including clothing, stationery and gadgets, with not even the bouquets traditionally presented to teachers on the first day of term always escaping the axe.

The typical 2106 spend broke down as: school bag ($30), text and exercise books ($25) and clothing and footwear ($90). The balance was then spent on bouquets and voluntary contributions to school funds.

Not every commentator, however, has drawn negative conclusions from the 2016 spending pattern. Some have even seen it as a sign of both stabilisation in the consumer market and an indication that higher levels of public funding are now being allocated to the education sector. Indeed, there are now a number of regions where textbooks and other educational items are provided free by the local education authorities.

In another changes, this year fewer schools are requiring the wearing of formal uniforms, although almost all still maintain a dress code, specifically prohibiting low-slung trousers for boy, leggings for girls and torn jeans and T-shirts for both sexes.

In terms of opportunities, many Chinese suppliers are still failing to produce appropriate school clothing for Russian children. This has seen Turkish manufacturers and distributors continue to dominate this sector despite the recent tensions between Turkey and Russia.

It is a different issue when it comes to school footwear, with the mainland still supplying the vast majority of such items. This is except in the case of sports shoes, where parents still prefer to invest in global or, at the very least, domestic brands, most notably Demix by Sportmaster – Russia's largest chain of sporting goods suppliers and the third largest in Europe.

Leonid Orlov, Moscow Consultant

Content provided by Picture: HKTDC Research
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