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Around the regionStrong growth forUkrainian retailIn 2011 the Ukrainian retail market, which increased byalmost 27 percent year on year, was worth UAH571bn(EUR60bn). The retail market continues to grow butgrowth last year was certainly much lower and this declineis likely to continue. Nonetheless, the retail market isgrowing and that is a good sign!According to the PMR report, Retailin Ukraine 2013. Market analysisand development forecasts for 2013-2014, the Ukrainian retail trade marketgrew in value to UAH571bn (USD72bn)in 2011, a year-on-year increase ofapproximately 27 percent. In comparisonwith the preceding year, the market continuedto rebound in 2011, and may possiblyeven have accelerated in terms ofgrowth. It was strongly supported by therecovery of the Ukrainian economy, animprovement in consumer sentiment, areduction in inflation, a 6.1 percentincrease in real disposable income and anincrease in the popularity of modernretail store formats. According to PMRestimates, the retail market will maintainits rate of growth of around 20 percentper annum to UAH 973bn (USD122bn)in 2014. Real disposable income and lowinflation will remain among the keydrivers of growth.Fozzy Group keeps its leading positionThe Fozzy Group XE "Fozzy Group"remains the largest retail market playerin Ukraine in terms of revenue. It is adiversified retailer, with a presence ingroceries, consumer electronics andpharmacy retail. In 2011, it had a 3.4percent retail market share. ATB-marketis the second most prominent company,with a 2.6 percent market share the sameyear. Over the last few years, the companyhas significantly increased its marketpresence, supported by a substantialincrease in demand among Ukrainiansfor discounter store formats. It is currentlythe largest retail sales chain inUkraine in terms of store count.EpiCentr K, the DIY retailer, was thethird most prominent company in 2011,accounting for about 2.1 percent of theretail market.Of the 10 largest retailers in Ukraine,only three are non-food concerns: twoare consumer electronics companies(Foxtrot and Comfy), and one is a DIYchain (Epicentr K).Overall, the top 10 players accountedfor more than 14 percent of the marketand had more than 1,800 stores in 2011.According to PMR estimates, their marketshare could have risen to almost 16percent in 2012, and the number ofstores could exceed 2,000. Among theleading 10 companies only two are foreignand these, the Metro Group and theAuchan Group, are grocery concerns.Beware of howyou package beerat ChristmasBefore Christmas, the Ukrainian easternorthodox church took a dislike tocertain beer packaging it observed inKiev.It would seem that certain beer producerswere suggesting that Ukrainiansknock back a few beers in the time ofpeace and good will to all people.The church thinks that this is unethicalto use Christmas as an excuse forselling things and that this is using theauthority of religious institutions tocommercialise alcohol. Christmas beerwas sold by two large Ukrainian breweries.One of them used a label showingchurch towers and the characteristiccross of the eastern church.The church issued a statement whichincludes the clarification that one couldunderstand if wine were labeled withreligious symbols as it is used in theEucharist sacrament but it is unacceptablein the sale of beer and vodka.Ukrainian MP Hanna Herman saysthat she will propose a law banning theuse of religious symbols on alcohol.This may pose a problem for thosewondering if their beer, vodka or wineis kosher or not. In the meantime MsHerman is calling for a boycott of thoseproducts showing religious symbols ontheir packaging. This ought to showhow much support there is for a changein the law, and now that Christmas isbehind us, hopefully the culprits will letus know what happened.Russian retail slowingThe retail market in Russia will continueto see further growth, however, thegrowth rates are expected to be lowerthan in the last two years. The main factoris the increasing maturity of the marketwhere customers are making moreinformed and careful buying decisions -and are less likely to be swayed by promotionsor unusual packaging. The slowdown in the economy is a second, but lessimportant, factor.CEE Packaging, www.ceepackaging.com Tel.: +48 22 2195466, +48 502 1590807