How shops and services in the border region are adapting to hostilities
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Increasing shelling of Russian regions close to Ukraine is affecting the business of consumer sector enterprises. Grocery stores are reducing opening hours, limiting deliveries and increasing inventories, restaurants are closing, and fitness clubs and beauty salons are seeing a sharp drop in traffic. The situation is aggravated by communication problems. Local business expects to receive government support and deferment of obligations.
The aggravation of the situation in Belgorod and the region, as well as in other border regions of the Russian Federation due to increased shelling from Ukraine, led to a sharp reduction in traffic at service enterprises and affected the work of the remaining open stores, market participants told Kommersant.
The X5 Group (Pyaterochka, Perekrestok, Chizhik) reported that some of the free-standing stores in Belgorod have reduced their opening hours to 21:00, and delivery runs until 22:00. They say that some direct suppliers have stopped shipping “for safety reasons”, and therefore “some stores may have experienced a short-term shortage of perishable goods.” X5 added that they are introducing an additional payment for drivers on flights to Belgorod and are building up stocks of key goods at distribution centers. At the same time, X5 notes an increase in demand for dairy gastronomy, drinks, meat, bakery products, fruits and vegetables.
Deputy Chairman of the Board of the Rusprodsoyuz Association Dmitry Leonov confirmed that some product suppliers are reporting a shortage of drivers in Belgorod and neighboring regions. But manufacturers are “ready to increase production if there is rush demand,” he assured.
Director of the Union of Independent Networks of Russia (UNSR) Ivan Babukhadze says that for retail trade the situation threatens to worsen the staff shortage in stores and warehouses, and attracting employees may require an increase in salaries. General Director of Infoline-Analytics Mikhail Burmistrov notes that the continuing threat to the life and health of workers and customers creates the risk of closing some facilities.
Vkusville has temporarily disabled free courier delivery from stores in Belgorod. “The decision to renew the option will be made based on the situation,” the company says. Otherwise, they clarified, “the network’s operation in Belgorod, Kursk and Voronezh continues as normal.” Lenta claims that there are “no problems” with stores in these regions.
Kommersant’s interlocutor among large product manufacturers explains that “the chains are trying not to limit delivery, but the situation is rather getting worse.” Chairman of the Presidium of the Association of Retail Trade Companies Igor Karavaev adds that “additional measures are being taken to ensure the safety and uninterrupted supply.” “Magnit” did not answer “Kommersant”.
Traffic and support
The service sector is also suffering. Thus, the head of the National Fitness Community, Elena Silina, reported that in the Belgorod region, club traffic decreased by 85% compared to average values, and card sales decreased by 60%. The founder of the Persona salon in Belgorod, Dmitry Khrukalo, says that on March 14, the salon suspended work for a week, and since then some of the employees and clients have left the city. About 10% of the previous number of visitors are ready to seek services, he specified.
A Kommersant source on the Belgorod fitness services market notes that clubs “make their own decisions about continuing to operate.” Another market participant says his children’s swimming studios have been closed since March 15: “It used to be possible to work with interruptions due to the missile threat, but now it sounds five or six times a day.”
A Kommersant source in the beauty industry clarified that he had to close the salon in Belgorod and move employees to other cities. Dmitry Khrukalo adds that plans to open new outlets had to be frozen.
The Vkusno-i Tochka restaurant chain reported that it had temporarily stopped work in Belgorod, in particular due to the closure of shopping centers. The regional governor, Vyacheslav Gladkov, announced this last week. Unirest (manages the Rostic’s and KFC brands) closed restaurants in Belgorod for several days for safety reasons, but now the outlets are operating. The restaurant in the MegaGrinn shopping center operates “in accordance with the facility’s regime,” the company clarified.
Mikhail Vasiliev, head of research and consulting at Focus Technologies, notes that in shopping centers in the Belgorod and Kursk regions the Mall Index (number of visitors per 1 thousand sq. m of retail space) for the period from January to early March was 10–12% lower than in 2023 year, while in the Russian Federation as a whole the value increased by 1%.
Vice-President of the Union of Shopping Centers Pavel Lyulin believes that shopping centers in Belgorod in the future may temporarily open in a limited manner with operating grocery stores and pharmacies. In the Kursk and Voronezh regions, according to him, the situation on the retail real estate market is “not so acute.”
Managing partner of Vanchugov and Partners Alexey Vanchugov says that in Belgorod we are talking about “a sharp decline in traffic, which will immediately recover if the unfavorable factor is eliminated.” “Business does not have the opportunity to influence the situation at the moment, with the exception of attempts to achieve recognition of the situation as force majeure, which will help relieve a number of obligations and avoid conflict situations,” he notes.
Dmitry Khrukalo plans to contact the bank with a request to defer payments, and to the landlord for discounts and deferments: “Already in April it will be problematic to pay employees’ salaries for March.” The SNSR calls “measures to support the insurance of stores, which will help reduce costs,” relevant. Mikhail Burmistrov also speaks about the advisability of a moratorium on the payment of interest on loans, deferment of taxes and targeted benefits: “We cannot expect that others will come to replace the closed enterprises.” The Ministry of Industry and Trade and the government of the Belgorod region did not answer Kommersant.
Uneven connection
In the Grayvoronsky urban district of the Belgorod region, mobile communications were lost at the end of last week after damage to infrastructure facilities. Earlier this week, local authorities reported that Tele2 communications had been restored, but the MTS network was not working. VimpelCom, MTS, Tele2 declined to comment. MegaFon told Kommersant that their network in the Belgorod, Voronezh and Kursk regions operates “as usual.”
Vyacheslav Gladkov, at a meeting in the regional government on March 19, ordered the introduction of inter-operator roaming in all border areas, as well as in Belgorod and the Yakovlevsky urban district, Interfax reported. The corresponding agreements were concluded between telecom operators a long time ago, roaming is included at the request of Roskomnadzor, says a Kommersant source in the telecommunications market.
In addition, Mr. Gladkov reported on the Telegram channel, as of March 17, 13 settlements in the Grayvoronsky urban district remain temporarily without electricity. Rosseti explained to Kommersant that the power supply to the group’s consumers, including telecom operators, in the Kursk, Voronezh and Belgorod regions, with the exception of individual subscribers in the Grayvoronsky district, is in full.
A Kommersant source in the telecommunications market says that a short-term power outage does not have a strong impact on the operation of equipment due to the presence of backup power sources: generators, batteries or solar panels. “Depending on the load on the network, they can provide power for up to two days,” adds another Kommersant source.
But in practice, according to one of Kommersant’s sources, “problems arise with batteries and generators.” Batteries, he explains, only last a very short time, and generators are usually placed only where a surveillance camera can be installed and the equipment can be fenced off. “If the power grid goes down, after two to six hours the mobile network hardly works, especially in areas where base stations are connected via a radio channel,” clarifies Kommersant’s interlocutor. Some UAV jammers, he adds, can also disrupt the synchronization of the network, after which it begins to work intermittently.
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