How and for which goods prices will change in 2024

Almost 80% of Russian companies will raise prices for goods and services in 2024, Aktion Finance analysts came to this conclusion after surveying the heads of more than 500 large enterprises. Of these, over a third intend to increase prices by 10%. Almost a third will raise them by 15%. And approximately every tenth company allows prices to rise by a quarter at once. Most entrepreneurs also strive to increase sales: for this, 40% will look for new markets, a slightly smaller proportion of top managers are ready to spend more actively on advertising.

“Kommersant FM” asked the heads of domestic companies how they see the prospects for their business this year? The general director of the Korenovsky milk canning plant, Igor Moskovtsev, said that the company plans to both invest in marketing and look for buyers in new markets: “In January, we increased by 5%.

I don’t know who was planning to raise prices by 15-30%; here it’s very difficult to raise prices by 5%. Firstly, this is a long process – agreeing on new commercial terms, and secondly, we immediately felt that consumers were not ready to pay more.

Therefore, we gave deep discounts so as not to reduce sales volume. The fact is that 70% of the cost is the price of milk, and its price has increased by more than 5% since the end of the year. In addition, we buy sugar, metal, tin, we buy cans, and the prices for them can fluctuate in some places synchronously, and in others completely at random.

As for natural chocolate and nuts, there is an upward trend, but I wouldn’t say it’s sharp. Now everything is completely frozen, I think, until March, until the elections. And then how events will develop is still unclear.

If we talk about advertising, we were quite restrained in this direction. Last year we tried to run a campaign when we launched a new ice cream on the market. It seems that there is a result, we are planning to support ourselves this year too, but closer to summer. The percentage of turnover will be small, maximum 1-2%. At the same time, we actively export products to the United Arab Emirates. At the beginning of February we agreed with a partner in Turkey. In the summer we want to focus on Siberia.”

As noted in the study, wholesale and retail trade, energy and light industry companies are planning to increase prices. Average prices for clothing in Russia, according to the MoySklad service, in October 2023 were 21% higher than 2022 levels, and shoes rose in price by 25% over the year. The main factor of these changes is the rise in prices of fabrics and the shortage of personnel, explained the founder of the Totti brand, Irina Polykovskaya:

“Logistics, raw materials, rent are becoming more expensive. Because of inflation, people demand indexation of wages, and specific specialists who are not trained in Russia – knitters, dessinators who make programs for knitting machines – these are generally endangered professions. Therefore, without increasing prices by approximately 10-15%, profitability decreases significantly.

We work in both the B2B and B2C segments, and we work very actively with private labels. For now, the in-house retail segment is small. This year we plan to open new stores in shopping centers, go to the regions, but first Moscow and the region, that is, we are for a stool with four legs.

We work on brand recognition, investing approximately 30% of our funds there. We work mostly on coverage and sales.

Compared to 2022, the company has grown 2.5 times. For 2024, I projected growth of approximately 30%. Now, of course, marketplaces are eating up a huge share. Our products are not represented on them. In addition, at the end of 2023, we noticed the following trend: we mainly sold cashmere, that is, people have money and they are willing to pay for quality.”

At the end of 2023, inflation in Russia amounted to 7.4%. As Rosstat calculated, among non-food products the most noticeable increase in price was for medicines, gasoline and cigarettes—by 7-8%. The average cost of services increased at approximately the same rate, and foreign tours became the leaders in price increases in this category. At the end of the year, the media also wrote about a noticeable increase in prices for communication services: over the year, according to analysts, tariffs increased by 10-12%. And Rostelecom, as Vedomosti reported, will increase prices for home Internet by 5% in 2024.

Consumers are already accustomed to such dynamics, states the CEO of the operator Investpribor, Alexey Sturov: “We can’t live without communication now, so consumers are already putting up with it. In addition, over the past few years we have not seen an outflow due to rising costs, that is, people do not tend to vote in rubles.

This year we are planning to increase prices, as it is necessary to update communication equipment. Its equipment costs, unfortunately, are rising.

If we do not take mobile communications, then in the broadband access segment the market is saturated with supply. And in order to somehow compete in it, we need to focus on advertising and promotion. And not massively, but to find those segments in which competitors have not reached you, some additional services: video surveillance, intercom, cable television. We plan to enter new buildings where there is not such a large number of offers, in particular in new areas of Moscow.”

As noted in the Aktion Finance study, most Russian companies plan to expand their geography of work in 2024. Almost 60% intend to expand to new regions of Russia; every fifth enterprise is considering friendly countries for expansion, including China, India and African states.

---

Everything is clear with us – Telegram channel “Kommersant FM”.

Elizaveta Skobtsova