The New Year’s spread on the tables of Petersburgers will be more modest this year than it was in 2021. They won’t have to skimp on ordinary goods yet, but delicacies such as caviar or red fish, as well as premium alcohol, will cost considerably more. Scammers and poachers who offer goods that aren’t readily available on the cheap may try to take advantage of this.
According to the Central Bank, annual inflation, as of November, was 11.98%. During the month, consumer prices increased by 0.37%; fruit and vegetables were among the items that rose most noticeably. Given that they are among the main ingredients in traditional dishes, we should expect that New Year’s Eve purchases will cost more.
Racing against inflation
As Svetlana Kazantseva, associate professor in the Basic Department of Trade Policy at Plekhanov Russian University of Economics, told DP, the annual growth rate of food prices in Petersburg was about 10%, according to research data.
“Prices for dairy and meat products are growing more slowly, which is explained by cheaper animal feed. Taking into account the inflationary component and the desire to save money, we can assume that the amount of the average bill [for New Year’s supper], if it does increase, will be an order of magnitude smaller than the rate of annual inflation, that is, about 5–7%,” the expert notes.
Marina Petrova, CEO of Petrova Five Consulting, is partial to other estimates, according to which the New Year’s meal will cost an average of four thousand rubles, which exceeds last year’s level by 12%. The simplest traditional dishes are taken into account: Olivier salad, herring under a fur coat, jellied meat, chicken with potatoes, sausage slices, champagne, and vodka. If the menu is expanded to include roast pork, fish aspic, red caviar, red fish, cheese, and cognac, then the cost will double. But it should be borne in mind that the percentage of consumers who themselves cook the food for their holiday meal has been decreasing every year. Many people have long preferred to buy readymade dishes at the store or order them delivered to their homes. However, this year they are likely to purchase more budget-conscious options. The desire to save money will primarily impact delicacies, seafood, salmon fish, beef, and caviar. The annual growth rate in prices for fish delicacies and caviar is already higher than the inflation rate.
Beware of fakes!
According to market participants, a decrease in the total volume of red caviar is expected due to a lower salmon catch in the Far East. It will be bring a higher price than in previous years, however. During the pre-New Year sales period, it is possible that we will see an increase in prices of 35–40% compared to last year. On average, pink salmon has risen in price by 25%, chum salmon, by 5%, sockeye salmon, by 15%, and trout, by 10%. According to the Fishing Union, this year the percentage of Pacific salmon red caviar on the Russian market is close to 100%. Prices for grainy caviar from Far Eastern salmon caught in 2022 increased by an average of 10–15%. However, last year’s caviar is also on the market at a more affordable price. According to Nikita Ostrovsky, a purchasing manager at Lakifish LLC, imported red caviar appears only sporadically on the Russian and Petersburg markets.
“We can talk about insignificant amounts imported from neighboring countries, such as Armenia and, to a lesser extent, Kyrgyzstan (red trout caviar is imported from there). This category of goods is in a lower price and quality segment by comparison with trout caviar, for example, from Karelia,” he says. Another factor are the Russian government’s measures to restrict the import of red caviar to stimulate domestic production.
Ostrovsky also warns that, since caviar is considered a mandatory part of New Year’s feasts, it is likely that buyers will look hard for cheaper offers — for example, at illegal points of sale, where it is offered at a price 50% lower than the average market price.
“This can be imitation caviar, which is sold disguised as the real thing. Caviar diluted with sunflower oil. Or obtained by poaching, without the necessary paperwork. In pursuit of profit, people are willing to purchase such products,” he points out.
In fact, imitation caviar is sold legally in many stores.
Participants of the delivery market expect an increase in orders of readymade meals for the New Year’s meal, despite everything. Many of them note that they usually experience an increase in customer activity on December 21.
“We don’t take orders all day, only until 8 p.m., and then we deliver them to customers’ homes. This time round, we expect the number of orders to double compared to normal days. We regularly observes this pattern on holidays. The average bill for orders in Petersburg should grow this year. In any case, last year it grew by about 25–30%,” Vera Pradchenko, CEO of VIP Fish [a service that prepares and delivers Japanese food], told our correspondent.
We won’t be left without champagne
Alcoholic beverages are an equally important part of the New Year’s feast. This year, the patterns of purchases in terms of category is almost identical to previous years. Sparkling wines and vodka are still the primary drinks. But there have been changes within the categories. They have been caused primarily by the aftermath of the departure of global brands, explains Dmitry Isachenkov, director of development at Ladoga. “It is safe to say that Russian vodka will be on 90% of Russian New Year’s tables — here consumers prefer domestic products with festive designs,” he says.
After the brands that made up about 50% of the champagne market in Russia left the country, producers less dependent on the political conjuncture began filling the vacant niches. For example, Ladoga signed contracts with three new suppliers and imported 80 thousand bottles in 2022 by year’s end, which is four times more than by the end of last year. So, Russian consumers can easily find real champagne wines in Russia if they wish.
It is worth noting that the share of imports of wines from Champagne [sic] did not exceed 2.8% of the total volume of sparkling wine imports. The choice of the mass consumer will be distributed one way or another among the major Russian producers: Kuban-Vino, Derbent-Vino, Novy Svet, and Inkerman. Affordable imported sparkling wines — Italian proseccos, Spanish cavas, French cremants, and Austrian sekts — will invariably remain popular.
Isachenkov notes that the structure of purchases in the whiskey category has changed significantly — it is this category that has undergone the most powerful changes after the refusal of major brands to do business in Russia. Most consumers were ready to look for a replacement within the category, including among domestic manufacturers. Thus, sales of entirely Russian-made Fowler’s brand whiskey had by year’s end increased four and a half times compared to 2021. Other consumers have shifted to other categories and are choosing rum, tinctures, brandy or vodka. Sales of still wines increased in proportion to the other categories. At the same time, the product range of both importers and Russian wineries has been growing.
“We should not talk about the growth of the average bill, but about the increase in the cost of each item in the bill. For many, this is a long-awaited holiday after the emotional turmoil experienced during the year, and the consumer selects special drinks for celebrations above the usual cost,” the expert argues.
Different things matter
On average, the prices of the ingredients for Olivier salad have increased by 10% in Petersburg. Potatoes and onions have fallen in price, while he price of carrots has not changed. Green peas and mayonnaise have risen the most, by 20% and 17%, respectively. Herring under a fur coat has risen in price by 7%, primarily due to the main ingredient, herring (which has gone up by 20%), while beets have fallen in price by 32% and potatoes by 25%. However, the so-called Olivier index should be treated with caution.
The various indexes are more of a marketing tool to draw attention to the researcher’s brand. There is the lipstick index (launched by Estee Lauder), which is a litmus test showing how women react to changes in the economy. The American manufacturer argues that, when incomes fall, sales of expensive clothes and shoes decline, while sales of luxury cosmetics, on the contrary, grow. There is Deutsche Bank’s cheap date index (based on the costs of taxi rides, lunches at restaurants, and hotel rooms [sic]). There is the latte index (based on the price of a cup at Starbucks, now Stars Coffee in the Russian Federation) and the Big Mac index (based on the price of a hamburger at McDonald’s, now Tasty, Period). The iPod index has become an atavism.
In Russia, the Telegram channel Sugar. Portion. Collect maintains a cup of tea index by charting weekly changes in the average retail price3s of the ingredients in the Russian Federation. Other researchers use the statistics issued by Rosstat as their benchmark when calculating the cost of preparing borscht, Olivier, or herring under a fur coat.
“Any index is an indicator of rising or falling prices. You can use it to calculate how the cost of goods changes from year to year,” says Daria Zhigalina, a business automation services systems analyst at Kontur.Market. “It is important to understand that all indices are real economic indicators, albeit served up in a humorous package. Every year we see how official agencies publish data on the basket of consumer goods. Everyone has been accustomed to this indicator for a long time and knows that it can be used to assess the quality of life in the country and the purchasing power of the populace.”
According to the expert, by assessing the fluctuations in the cost of ingredients, we can analyze the economic situation separately in each region and in Russia as a whole.
For retailers, the New Year’s Eve period is a time when they can increase their revenue. Judging by the foot traffic in stores, the current situation will most likely not affect retail chains negatively since their turnover is growing. At the same time, the structure of sales will be redistributed towards traditional and inexpensive goods. In my opinion, retail has already begun to change the structure of its offerings, reducing the number of goods above the average price. In this regard, premium retail chains may be in a less advantageous position.
—Irina Kapustina, Director, Graduate School of Service and Trade, St. Petersburg Polytechnic University
Caviar has not been imported [to Russia] since 2014, after government restrictions on the import of certain types of food were enacted. Prior to this, Russia imported frozen red caviar from the USA and Canada. Here it was processed and sold in salted form. The salmon catch this year amounted to 300 thousand tons, and 13–14 thousand tons of caviar were produced. Last year, the catch was over 500 thousand tons, while more than 20 thousand tons of caviar were produced. Compared to last year, the shortfall is 30%. Despite the fact that the supply of caviar is much lower than last year, the price has not increased. If there were a further rise in prices, people would simply stop buying it. It is possible that before the New Year some sellers will raise prices, but they will bring them back down after the holiday.
— Alexander Fomin, Vice–President of the Fishing Association
The growth in the price of goods that have always been considered delicacies — caviar and salted salmon— is indicative. They have doubled in price over the year, and the same dynamic is typical for most other frills. This year, salmon will be largely replaced by trout, which is cheaper, and eggplant caviar will be preferred. Real incomes fell in Petersburg by 2.7%, according to official statistics. By my calculations, for a business person, the celebration of the New Year will be about one and half times more expensive than a year ago. The selection has become somewhat smaller, but if you want them, you can find all the goods you need. We should especially not envy pensioners living on their own. The subsistence minimum doesn’t take factor in the cost of such events.
—Anatoly Golov, Co-Chairman of the Consumers Union of Russia
Russians have no reason to skimp on their New Year’s meal. On the contrary, consumer spending on the New Year’s meal may increase due to both inflation and the fact that some Russians will not be able to celebrate the New Year outside the Russian Federation and will spend money at home. Recently, statistics were published that about 15% of the population have experienced an increase in income, while 20% have experienced a decrease. Consequently, some consumers will still increase spending for the New Year and their average spending will grow at a level slightly higher than inflation.
—Artyom Tuzov, Executive Director of the Capital Markets Department at IVA Partners Investment Company
Source: Darya Zaitseva, Darya Dmitrieva & Yevgeny Petrov, “Petersburgers won’t be serving caviar and red fish on their New Year’s tables,” Delovoi Peterburg, 23 December 2022. Infographics, above, courtesy of Delovoi Peterburg. Translated by the Russian Reader
The morning begins with me looking at the light on the computer monitor. If it is on, it means there is still electricity. When I see that the light is on, I immediately get up and go put on the kettle to refill the thermoses. We got hold of the simplest gas stove, and you can of course heat water on it. But first of all, there is not an endless supply of gas and we skimp on it. Secondly, I am afraid of these stoves: over the past month they have exploded four times in our district alone. I walked past the residential buildings where these stoves exploded and saw the broken windows and cracks in the walls. It’s a little scary, let’s just say.
After I put the kettle on, I get on the Telegram channels. I have to find out whether there were [missile and drone] attacks at night, and if so, whether they hit infrastructure. Now this is the most terrible thing, because if it suddenly turns out they hit infrastructure, it means that soon there will be no heating and water. So then I start rushing between washing and drying my hair, charging the power banks and flashlights, getting the laundry going, and cooking food. You never know when the lights will go out and that’s why you do everything quickly, all at once. You feel like a trained circus animal.
When I’m going somewhere, I always put a few flashlights in my backpack. It’s strange to imagine that not so long ago a flashlight was not a mandatory item. Now it is a “must have” (my phone suggests writing “must heh” — heh!), like a medical mask during the time of covid. It’s even more important! When I go outside and travel somewhere, I never know if there will be light where I’m going. Most often there is no light — or cellphone connection for that matter. I hate this feeling of being in a vacuum: there is no mobile internet, no telephone connection, no light, and no matter what happens to you, you won’t even be able to call an ambulance. You’re living “in the moment,” damn it. Where there is no light, the elevators don’t work. I usually walk slowly up to the sixteenth floor by an isolated dark staircase. Somewhere on the eighth floor there is usually an old, peeling stool on which I can sit in the dark and take a break. I usually don’t need such a rest, but sometimes I turn off the flashlight and sit on this stool in the dark and listen to the wind blowing in the stairwell.
Last week I got stuck in the elevator: while I was going up, the lights turned off and the elevator stopped and went dead. There was a chair inside and a box containing water and medicines. I sat down, but quickly froze. Immediately, before the phone connection disappeared, I had telephoned my husband and asked him to call the help hotline so that they would get me out of there. Otherwise, it was possible to get stuck there and sit for four to seven hours. My husband got through to the hotline in half an hour — he was the twentieth in the queue. Half of the city sits in frozen elevators every day. They pulled me out of there.
When I’m returning home in the evening, I make a wish: please let there be light at home. I ride in a minibus and nothing is visible through its windows since neither the streetlights nor the traffic lights are working. I have developed a “sense” of a way that I cannot see, but I know and understand where I’m going and when I need to get out. After walking up and down all these stairs and unlit streets, I really want to find the light on at home for at least half an hour. If, when approaching our building, I see that there is no light, I slow down. There’s nowhere else for me to hurry — it’s dark and pointless everywhere. Life in general has become quite hectic. Although I have hated hurrying and scurrying my whole life, now I have to hurry and scurry.
Sometimes I manage to find a store where the lights haven’t been turned off yet. It’s like going into a church: it’s light and warm there and your mood improves a little just because you’re in a store and it’s bright inside. The prices have been shooting up monstrously and I wander the aisles for a long time figuring out what I can buy to fit my modest daily budget. But basically, since the light began to leave us, I have got used to eating rusks and croutons in different flavors. I’d never bought them before — they’re not my kind of food — but now they are quite handy. First, they are relatively cheap, and second, they come in different flavors. It’s the illusion of variety. Third, they don’t need to be cooked.
I went to see my mom yesterday. We discussed all these common everyday problems of ours. And then Mom decided to make a joke and asked:
“What are you all doing for the New Year?”
Neither she nor I laughed.
Source: Sergey Abashin, Facebook, 15 December 2022. Professor Abashin is quoting a letter he received from a Ukrainian friend or colleague, but he does not identify her by name or mention where exactly she lives. Translated by the Russian Reader