Rouble trouble: Kaliningrad buyers spending their money on anything they can

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A Lithuanian man, who introduces himself as Algis, has been living in Kaliningrad, Russia’s western-most exclave, for two years and tells DELFI about consumer sentiment in Russia.

“When there were still Lithuanian products, shop shelves looked fuller. They look much more modest now. If you are late for your after work shopping, small grocery stores might be out of stock. You’d still find food in bigger supermarkets, though,” the man explains. “Prices are going up, while people are still getting paid as much in roubles as before.”

Electronics fever

Algis refutes reports that grocery stores are empty and look like during the perennial Soviet-era deficit. He says that there is markedly less choice of products and quality food has become more expensive.

Some stores, however, have been swept clean, he adds. People are massively buying home electronics and appliances. Moreover, the construction materials chain Baucentr has closed its shops throughout Kaliningrad.

“They say they are updating their prices. How can it be otherwise, when the rouble is losing value every day,” according to Algis.

He says that Russians are buying TV sets and other imported electronic goods.

According to Algis, the authorities in Kaliningrad claim that about 80 percent of products sold in the region are imported goods, therefore they have turned to President Vladimir Putin to do something to help Kaliningrad.

“Imported goods are disappearing from shelves,” he notes.

Local inhabitants are dissatisfied with soaring prices. “They urge the authorities to look into the price hikes, because people feel disadvantaged.”

Algis says he has read recently that average retirement pension in Russia has been raised to about 11,000 roubles (a little over 100 euros), but it is comparatively little for Kaliningrad prices.

He says that food prices have been gradually growing since the beginning of the year, but the trend has worsened significantly after Russia announced an embargo on food imports from the EU last summer.

Salmon is luxury product

Algis says that product offer in Kaliningrad looks markedly poorer than six months ago.

“We have sensed a drop in quality. Big supermarkets do sell good products, but they are priced accordingly. The view in open-air markets is poor. Even smaller grocery shops sell products that seem at the end of their shelf life,” Algis says.

He is still able to buy chilled salmon, but has to pay almost twice as much as he used to.

“Still, there is no food shortage in shops. When I heard that people were buying everything up, I went to look for myself. But no, you can still buy buckwheat, cereal and other products,” he says, adding that prices for the same product may vary significantly from shop to shop.

Algis says he has noticed that Russian shoppers are desperate to spend their roubles on anything they can lay their hands on.

However, he adds, that might have less to do with the rouble’s recent troubles than with shopping fever that is usual for the season.

After the “Black Monday”, when the rouble went down almost 25 percent against the euro, Algis says he has noticed more people queuing at bank branches and currency exchange desks. “The demand for euros and dollars is huge. Everyone is queuing and buying as much as they can and keeping a close eye on the exchange rate.”

He says that there is a general mood of anxiety in Kaliningrad.

“There might not be any open panic yet, but there are signs. Just imagine – people had their savings and now suddenly a huge chunk of their money is gone.” When Algis moved to Kaliningrad, one euro could fetch him only half as much in roubles as now.

The Russian rouble has taken a nosedive this Tuesday, when for some time one euro would sell for over 100 roubles.

The World Bank predicts a 0.7-percent contraction for the Russian economy in 2015. However, should oil prices continue to slack, the recession might hit even harder.

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