The current situation
Commerce occupies a very important place within the Russian economy, accounting for 15 percent of GDP and 10 percent of tax revenues in the treasury and with about 13 million people employed in the trade sector. From large shopping malls to small outlets, specialized shops to ordinary convenience stores, trade workers are ubiquitous in Russia with up to 25 percent of jobs across Russian regions being in commerce. That being said, there is not much prestige in this kind of work, save for managerial positions. According to Artyom Kumpel, the executive director of Avito Jobs, the median salary of a shop clerk in Russia is as low as 30,000 rubles (less than 500€). Whereas a salesperson in Moscow might earn 45,000 or more, in some regions a meager 15,000 is considered a normal income.
With the onset of a full-scale Russo-Ukrainian war on February 24, Western countries swiftly adopted sanctions that aimed, among other things, to restrict commerce in the aggressor state. Major brands and companies announced they were leaving Russia and closing down their stores, while external and internal trade operations were expected to dwindle due to logistical problems. A host of western companies, many of which are involved in trade, have left Russia, curtailed their business in the country, or, at least, have announced they are going to leave. Among these are, to name but a few, H&M (which had over 150 stores in Russia), IKEA, Inditex (which owns Zara, Bershka, Massimo Dutti, and other brands), Adidas, Decathlon, Puma, Rolex, Swarovski; car manufacturers also shut down their dealerships. Many tech brand stores closed down after manufacturers withdrew from the market (although sales have partially recovered thanks to so-called parallel importing). Numerous experts have predicted a rise in unemployment across different sectors, including commerce. All of these measures, among others, were designed to cut off revenue for the Russian regime that would be used to continue the war, while also sending a message to the population about the detrimental consequences of such reckless military gambles.
In an interview with Interfax, the chairman of the Russian Retail Companies Association Igor Karataev complained about structural problems, saying that “difficulties faced by the commercial sector this year are unheard of. Destruction of logistics chains, the necessity to quickly find new suppliers, inflationary pressure, decreasing effective demand: this is the first time the sector is experiencing all of these factors simultaneously.”
It was not a sharp drop, but, by August, retail turnover had already decreased 8.8 percent at an annual rate. Decline began in April and has been accelerating each month, sometimes ahead of the government’s overly optimistic predictions. Unsurprisingly, non-food items dominate the process, as those expenses are easier to cut down on.
We got off cheap
Notwithstanding the dim prospects and the alarming statistics, most sales professionals are not yet speaking of any significant changes to their own situation or their working conditions since the beginning of the war, all the while noting dwindling profits of business owners.
“No, the war didn’t affect the business, it is just what it used to be,” said Ilona, who works at a market stall in a North Caucasian region (all names in this story have been changed). Rosa, a clerk at a grocery store in Moscow said that “yield has dropped, there aren’t many customers. Men have disappeared, women are stretching their money. My employer is losing money, he doesn’t have the kind of revenue he had before, but I wasn’t affected personally.” Vladislav, who works at a Moscow bookstore, reported that “one of the shop’s founders left Russia, otherwise things haven’t changed much. It doesn’t even seem like there’s fewer customers.” Evgeniya, an employee of an online technology store, confirmed that there haven’t been any dramatic changes: “during the first few weeks I thought I’d be out of job and contracts would be canceled, but then I calmed down. But I wish it ended as soon as possible, I feel very sorry for people on both sides.”
This observation of little change in labor compensation and work conditions is also relevant for layoffs. Everyone says that there has not been much downsizing, if any, while some businesses have even hired new staff. Alexey, a technical professional in a Stavropol Krai company that deals in wholesale and retail distribution of sound equipment said: “no, there’s no change. There was a planned recruitment campaign, although no hires beyond what was planned. Employees haven’t been affected.” Experts confirm that employers have stopped hiring but are not making staff cuts: “A typical reaction for periods of uncertainty is pausing recruitment. This was especially evident between March and May when demand dropped 8 percent from the previous year across the country.” However, the Macroeconomic Analysis and Market Environment Trends Center predicts that, by 2030, about 3 million people working in retail and wholesale operations could have lost their jobs due to the developing “new reality”; they note that the current low unemployment rate is a temporary, short-term phenomenon. Layoffs were beginning already in May, when the Russian branch of AliExpress terminated about 40 percent of its employees and OZON let 20 percent of their workers go.
Significantly, a large majority of respondents noted that all such changes had already happened during the COVID-19 pandemic, after which there was not much to cut down on: “My wages were cut earlier on the account of the covid crisis, so the war didn’t affect it, covid did,” said Andrei, who works in a wholesale company in Moscow. He added, however, that logistical problems have greatly complicated his work: “Large German companies stopped importing raw materials. Some companies shut down their business in Russia, laying off the staff. That has made work more difficult, as we have to look for alternatives.” Vasily, who deals in online tire sales, reported similar difficulties causing “dramatic changes” in his work. It could take weeks to receive goods due to logistical problems. Larisa Sergeevna, director of a retail chain specializing in bags and suitcases, confirmed that although there have been no layoffs, there was no potential for downsizing after earlier economic hardships: “We have already had hard times: during Covid and even before that, because it was never easy here in Russia. We had already reduced our staff as much as was possible to do without firing people: if someone left, we wouldn’t hire a replacement.”
Anastasia, who works in a Saint Petersburg bookstore, also said that there has been no downsizing or cuts in wages or bonuses. The management has cut other expenses instead and has slightly increased prices. It was the price change that made an impact on the staff’s everyday operations: “It was a significant increase, several hundred items were reevaluated each day, every item represented by dozens of copies that you had to look for around the store. This was a serious change in the staff’s normal routine: a lot of multitasking. At some point, there was so much of it that we decided to stay for the night at the store in order to do at least a part of it…”
Even western companies’ shutdowns did not come as an immediate disaster for their Russian staff. According to Pyotr, who is employed at Samsung’s brand store, “some stores were closed and everyone was paid wages only. Bonuses came back later, and incentives were optimized, but revenue dropped anyway. That’s because purchasing power decreased. Some stores were reopened. I guess we got off cheap.”
Things have been different in large chain stores, already notorious for poor working conditions and quick staff turnover. “Cashiers, loaders and everyone else had their wages cut. The cuts were substantial,” Alevtina, a cashier at a SPAR store in Moscow, said, “ten thousand roubles or so, which is about 10 percent. Three or four were laid off out of a hundred, but that’s not that many.”
Cuts in bonuses and an increased workload were also reported by Viktoria, managing doctor of a veterinarian pharmacy in Krasnodar Krai, and Daria, a clerk at an upscale fashion store in Moscow, who also noted that her bonuses were now paid under the table while penalties were introduced for failing to meet performance targets. Daria confessed overcharging one of her customers by a few thousand roubles in order to meet her targets amid dwindling sales.
Overall, commerce seems to have worked its way through the first challenges of the war, the sanctions, and the exodus of western businesses. Although demand and purchasing power have somewhat contracted, Russians have not stopped buying commodities, especially food. Besides, Russian commerce has already experienced sanctions and restrictions, as well as a major setback during the Covid years, so workers in this sphere are already accustomed to living frugally and with low expectations. Many of those who lost their jobs managed to find new work quite quickly, especially as mass emigration from Russia has kept the unemployment rate low so far. However, significant, albeit not critical, worsening of working conditions has to be noted, as well as increasing complexity of operations.
Nobody wants to live under bombs
There is no agreement in personal opinion about the war among sales professionals, in line with Russian society in general. While many disapprove of the “special military operation” to some degree, largely out of fear for their relatives and a desire to live in a peaceful developing country. Others believe that the war is a logical development of earlier events in international politics, while still others vocally support the war. A popular attitude is a disengaged opinion that “nobody knows the whole truth, although killing people is wrong,” or that “now that we have got ourselves involved in this, we have to win.” Aleksei from Stavropol Krai put his and his colleagues’ opinion this way: “the reaction was neutral overall. We had it coming, so here we are.” Andrei from a wholesale company in Moscow also reported neutral to positive opinions about the war among his colleagues: “Most of my colleagues are women, and their response was neutral. Most are women over 40. They basically believe that, whatever is happening, you must support your dear government. They think that we owe it to the state to do whatever it tells us to do.”
Angelina, manager of a pharmacy in Moscow Oblast, takes a more radical stance: “I am a fighter myself, and I fully understand that we must fight against Nazism. Some of my employees used to live in the Donbas. Obviously they are in full support [of the ‘special military operation’].” She explained their support by the fact that they witnessed Ukrainian shelling: “nobody wants to live under bombs.”
However, a radical position like this is rather rare. “I took it very hard, because half of my brothers were there. Two brothers came back, but I still worry about the others,” said Alevtina. Her brothers live in the North Caucasus, home to an especially high number of military servicemen who went to fight in the war as soon as it started, although many of them were not enthusiastic. For many in this region, contract military service is one of the few ways to earn a decent salary by local standards. Rosa, the grocery store clerk from Moscow, feels deeply anxious about her loved ones and the war: “I was shocked. I want only peace. I fear for my children. My colleagues feel the same way.” Larisa, the retail chain director, echoed this opinion: “Of course I was shocked. I am a professional historian by training, and this is too similar to disastrous events in the past. I am also a religious person. ‘You mustn’t kill anyone’ is, for me, Orthodoxy’s most important principle. I am shocked, the business owner likewise. I feel that the future is being taken away from my country, two countries have lost their future and their present. I don’t need much anymore myself, but I feel bad for the children.” However, she does admit that although many of her colleagues support her opinion, employees do hold differing opinions about the war; arguments are common, and sometimes she uses her senior position in management to push her viewpoint through. “I get very emotional. Yesterday, I found the poem ‘Where does the Motherland begin’ left on my desk. I love my Motherland, but this is just manipulation. I love it more than anyone, it’s just that I want the people in my Motherland to be happy and smiling, not crying over coffins and blaming the neighboring state.”
According to interviewees’ direct responses, the beginning of the war did not significantly impact commercial workers at large, except in certain, already problematic segments. However, the “partial” drafting call on September 21 must have had more ramifications. Experts of the New Retail agency predicted significant changes to the labor market, including more damage to logistics due to the massive drafting of drivers, delivery men (because they are “young and strong”) and security guards. The experts also predict an unusual shift in recruitment toward women and the over-50s who used to have a hard time finding work. Immediately after the drafting call, demand for temporary workers spiked, including shop assistants, drivers and sales managers, an increase of 52 percent in October, according to the job portal hh.ru.
Yet, surveyed sales professionals have not registered any major changes related to the draft in their companies. Most of them know someone who has received a draft notice, but said that their colleagues have not been affected yet. In many companies, however, there were men who decided to leave the country before being drafted, and so replacements had to be found. Some of our responders also noted a high level of anxiety related to current events that is interfering with everyday work. Overall, opinions about the draft were divided similarly to the opinions about the war itself, with some subtle differences.
“Of course it was a major news topic that everyone discussed. There was some tension, but nobody received a draft notice, so eventually everyone calmed down. My colleagues wouldn’t be thrilled to go, but, if a notice came, I don’t think anyone would hide,” said Aleksei. Vasily took a similar stance to the mobilization: “I see the military operation as necessary evil. I decided that, if I get called up, I’ll go.”
“Nothing you can do about it, you do what you have to do, but I still fear for the children. It’s our country, we live here, so what can you do?” said Rosa the shopping clerk, agreeing to some extend with Aleksei and Vasily. She went on, “but I fear that my child goes and doesn’t come back. I have a son myself; thank God, he hasn’t been drafted yet and it’s been stopped for the time.”
Although personally ready to participate in the war, Angelina Sergeevna is not happy about the draft: “In my opinion, this is something that professionals should do. If there were martial law, we’d all go. We’re all women in our team, but we’re also medical workers and subject to call-up, and I think each one of us would go if notice came.”
In some companies, the draft call has led to intensifying military registration work. Andrei, who is opposed to the war and the draft, was forced to register with the military and receive a service card, which he successfully avoided. “They were nervous, like, why don’t you have a service card, when are you going to have one, go get it, we need to have you registered. Security personnel and the lawyers were involved.” Meanwhile, other organizations tried to protect their employees from being called up: “People from the local administration demanded a list of all male employees. Our managers told them to shove it and drafted a response together with the lawyers. If that doesn’t help, as they say, they’ll fire everyone, meaning that people will be working unofficially to minimize exposure,” said data analyst Igor, who works in online commerce.
Ilona, the market vendor from North Caucasus, does not expect any good to come out of the draft either: “Business might get even worse now than it was before, people are going to move out. The city feels paralyzed now. It isn’t like everyone only talks about that at the market. There are some supporters, for sure, and some who object, like myself. I know some people reacted in a certain way, but it’s not something you speak out about.”
Many found the news about drafting hard to take on an emotional level, all the more so as friends and colleagues were leaving the country to hide from the war, just like after February 24. “I was crushed by the news about mobilization. I got really scared,” Anastasia shared. “A second wave of emigration happened. There were new changes at work: many guys quit and left to other countries, some switched to distance working. I had a much harder time working. Every morning I struggled to get out of bed and spend another day working, not knowing what was coming next.”
After the war began, when the first sanctions were introduced and western companies started leaving, many expected—in hope or in panic—a dramatic drop in the Russian economy, rapid inflation growth, commodity shortages, and a decrease in purchasing power. In the ninth month of the war, none of this has happened on the scale that was predicted. Commercial workers, already accustomed to hardship and uncertainty, insist that the war and the draft has not make much of an impact on their situation. It is clear, however, that changes are happening, however slowly. Everyone has to face new challenges as work is becoming more difficult, profits dwindle and business owners skimp on staff where possible. The evident rise in anxiety and depression does not foster an increase in productivity, neither does the societal split of opinions about the war. Lastly, although unemployment has been curbed so far by mass emigration and the “partial draft,” those effects can only be temporary.