Russia’s Watcom Shopping index got off to its worst start on record during the first three weeks of 2021.

The index dropped to 330 in the third week of the year against 489 a year earlier, which was the best result since 2016.

Retail sales rebounded strongly last summer after the lockdown restrictions were removed, but they began to flag again in September as a second wave of the pandemic got under way.

Foot traffic at Moscow’s leading malls began to pick up again as the holiday season in December approached, but the level of foot traffic remained well down year on year in Russia’s worst shopping year since Watcom was launched in 2014.

However, traffic collapsed again after the end of the holidays on “Old New Year” on January 14. That means the index was down just under 50% y/y in the third week of January, although the comparison is against a high base, as the pandemic didn't get underway until March 2020, the same month that Russia’s economy was hit by an oil price shock.

Retail sales and foot traffic should start picking up in the coming months after the government launched its mass immunisation programme in December, which is ongoing. Infection rates are already beginning to fall and forward-looking indicators, like Russia’s PMI indices, already suggest the mood is lightening.

At the same time, the government has launched a national projects 2.0 revamp that is designed to boost incomes and spending that might give the economy an added shot in the arm later in the year.