A record number of “Soviet” department stores opened in Russia Business

For comparison, in 2022, only six new department stores appeared in Russia, and in 2021 – seven.

CORE.XP attributes the record growth of new stores of this format last year to the expansion of Russian brands and the increase in vacant premises following the departure of foreign companies.

Manufacturers of goods save up to 70 percent by presenting their products in a department store instead of opening a full-fledged store in a shopping center, says Marina Malachatko, head of the retail department at CORE.XP.

Create your own retail network or even switch from e-commerce. selling to a physical store is expensive and difficult for start-up brands, observes Nikolay Konstantinov, CEO of Trend Island. According to him, a department store facilitates market entry and helps with marketing.

In addition, as M. Malachatko adds, the format of department stores allows international retailers who want to be represented in Russia, but “for various reasons” cannot develop in the country, “not to lose contact with customers.”

In the past, the growth of this trade format was not significant, because these stores sell unpopular goods, says Michail Molchanov, the owner of the Blind Chicken retailer. According to him, these are usually the products of Russian designers who worked in the middle price segment – now they have raised the prices to premium (highest) level while maintaining the same quality.

Photo by Shutterstock/Store in Russia

In total, according to CORE.XP, 18 players are currently developing department stores in the Russian market. The total area of ​​such objects is 258.6 thousand. sq. m, most of them – 167.8 thousand. sq. m – operates as part of shopping centers.

The average area of ​​one department store exceeds 2 thousand. sq. m, and the number of brands represented in it ranges from 40 to 250.

Department stores first appeared in France in the 19th century. Later, this trade format became widespread in the USSR: state department stores and central department stores might be found in all major cities of the Soviet Union. After the 1990s, most department stores in Russia were reconstructed and continued to function as shopping centers.