Business is not in a hurry to kiosks – Newspaper Kommersant No. 36 (7481) of 03/02/2023

Small and medium-sized businesses were wary of the proposal of the Ministry of Industry and Trade to open kiosks at the entrance to shopping centers. Entrepreneurs are afraid of a repetition of the campaign for the mass demolition of non-stationary objects, high competition, problems with obtaining permits, difficulties with the supply and certification of goods. Regulators consider the fears unfounded, and experts are sure that the kiosk format can only be in demand in the summer.

Less than 50% of small and medium-sized businesses see prospects in the initiative of the Ministry of Industry and Trade to open kiosks at the entrances to shopping centers. These are the results of a study by GEO.Platforma service analysts who interviewed over 1.3 thousand entrepreneurs in different cities. According to these data, 29% of business representatives are concerned about high competition, 26% – problems with obtaining permits from regulatory authorities, 25% – difficulties with suppliers. Entrepreneurs also fear difficulties in certifying goods and finding employees.

In addition, 80% of entrepreneurs surveyed by the service consider the risks of repeating the campaign of 2015-2016 to demolish retail kiosks to be high. As GEO.Platforma reminds, in 2014 there were several thousand such objects in Moscow alone, and in 2015-2016, hundreds of points were declared illegal and liquidated. Similar measures were taken in other regions.

The head of GEO.Platforma, Aleksey Alekseev, notes that due to possible difficulties, entrepreneurs are not ready to invest large amounts of money in launching kiosks. Thus, 39% of service respondents can spend up to 1 million rubles to open a point, and 24% – up to 5 million rubles. Over 50% of entrepreneurs considered the format suitable for selling products, and 13–15% for selling clothes and shoes.

In January 2023, the head of the Ministry of Industry and Trade Denis Manturov recommended that regional authorities allocate places for small and medium-sized businesses at the entrances to shopping centers and hypermarkets, RBC wrote. As noted in the publication with reference to the recommendation, this is how small businesses can use the traffic of large objects. Seats are offered free of charge.

Oleg Voitsekhovsky, Managing Director of the Russian Council of Shopping Centers (RSTC; unites the owners of Smolensky Passage, the Rio, Kapitoliy, Kuntsevo Plaza, etc.) chains, notes that the most obvious platforms for the successful operation of kiosks are markets. But to maintain traffic, which in these formats could have been noticeably reduced recently, systemic investments are needed, as shopping centers do, investing in concepts, advertising and marketing, he says. Then, says Mr. Voitsekhovsky, it will be easier for novice entrepreneurs to find a platform for starting a business.

The President of the Small Format Trade Association, Vladlen Maksimov, considers fears of a repetition of the campaign for the mass demolition of kiosks to be unjustified, since the placement will be coordinated, among other things, with local authorities. But, according to him, not all objects will be able to receive an influx of buyers at the entrance to shopping centers, but, for example, those sellers who can offer a unique product. Alexey Vanchugov, managing partner of Vanchugov & Partners, believes that the format of kiosks in front of shopping centers can be commercially justified only if temporary thematic fairs are held in the warm season.

The Ministry of Industry and Trade told Kommersant that the proposals have already been supported by a number of large retail chains, the farming community and representatives of the country’s shopping centers. The initiative will support small businesses, and shopping centers and chain stores, with a competent neighborhood scheme with kiosks, will receive an increase in traffic and sales, the ministry says, recalling that the attendance of shopping centers was declining in 2022. As emphasized in the Ministry of Industry and Trade, a small stationary facility is located legally, in cooperation with local authorities and shopping centers, so there can be no fear of demolition outside the framework of contracts.

Alina Savitskaya