Changes in consumer demand at the time of crisis
— 2009-05-12 —

Tea Grguric, Produkty Pitania Vice-President

Most Russians have experienced difficulties related to the economic slowdown and this affects consumer demand. Most Russians are concerned about growth of prices as a key effect of the crisis.
Researchers have found out that consumers use a variety of tactics to compensate for their losses resulting from increases in price. Some of them buy less and shop less frequently
and many prefer to buy cheaper products and to avoid extra visits to restaurants.

Recent years’ statistics show that due to a number of drivers the number of convenience products consumers and the quantity of such products consumed has been growing steadily.
As the quality of convenience products in general grows consumers are taking a more positive general attitude to this product category. Based on survey results we expect that traditional convenience products and those based on chicken meat are bound to grow.
Value for money will grow as a strong major factor determining consumer preferences with product price playing the lead role in building sales.
We intend to maintain the high quality of our products from Zolotoy Petushok and Domashnaya Skazka trademarks. Predictions at a time like this are doomed to be dubious but based on information on consumer habits and taking into account the convenience of our products as a key competitive advantage we are hopeful for the better.
Today’s frozen convenience products market is consolidated at regional levels with no major national player to set the pace for further development of the segment (all national leaders account for only as little as about 40% of the market). It means that in big cities consumers will focus on price/quality ratio while in smaller cities they will mainly be looking at lower prices.
The crisis will undoubtedly affect demand for frozen convenience products but we can assume that in the crisis times consumers will primarily be looking for traditionally high quality of products offered in the medium price segment, and Zolotoy Petushok brand offers just that.
2010 will see gradual upturn of the economy with real popular income growth rates regaining momentum to result in restored general demand and the consumption of frozen convenience products spurred by the general economic recovery.