At the beginning of October, the State Statistics Service published data on the turnover of retail trade for the past year in comparison with 2022. The experts of the UTG company analyzed the data and identified the reasons that affected the results of the retail trade of Ukraine. According to the results of 2023, the turnover reached UAH 1,821,931.2 million, which is 30% more than in 2022. But in dollar terms, the turnover of retail trade in 2023 amounted to $49.8 billion, in contrast to $43.2 billion, which is 15% higher.

The increase in turnover took place in very difficult conditions. First of all, in 2023, limited reserves for RTO growth were noted. Namely, last year there was a mass exodus of the population abroad and the closing of luxury segment stores, such as Chanel and Cartier. Population migration led, firstly, to a decrease in the number of children, which caused a lack of demand for children’s entertainment and education, and a decrease in the consumption of goods and toys. Second, there was a drop in demand for adult leisure and recreation due to the curfew. This has led to a low feasibility of buying evening wear. Which further aggravated the consequences of the pandemic regarding the limitation of the need for clothing due to remote work. Thirdly, there was a restrained work of entertainment operators – cinemas, entertainment centers, bowling alleys, sports and catering establishments.

Also, in 2022 and 2023, there was a total withdrawal of retailers from Russia, or their attempts to re-register as Ukrainian legal entities. The closing of stores of international chains, the lack of alternative department stores and the pause in the entry of new retailers also had a negative effect on the turnover of goods.

The impact of the war in the country also affected the activities of SECs, especially those that were completely or partially destroyed as a result of shelling. Those who were not affected were forced to relocate operators from the east to the south or west of the country.

At the same time, retailers optimized revenues and the number of stores. To do this, they focused exclusively on profitable objects and closed unprofitable ones. Operators also significantly reduced advertising and marketing costs, started total savings on utility bills: heating, air conditioning, electricity, water. Retailers also experienced logistical problems, insufficiency of goods, rising prices of raw materials and shortage of personnel.

Against this background, developers noted many negative impacts on the part of tenants, such as: slowdown of expansion, lack of financing for development, refusal of investments, reduction of costs for repair works (such as “fit-out”, opening in ready-made premises), transfer of risks to managing SEC companies (often in the form of payment % RTO).