With bank deposit rates up, consumers are choosing saving over spending, the head of retailer DNS has said

Russia's home appliance and electronics market is facing its sharpest downturn in decades as consumers opt to save rather than spend, the head of major retail chain DNS has said.

Dmitry Alekseev made the comments on Thursday, writing on Telegram that current conditions are unprecedented in his 30 years in the industry. Preliminary estimates suggest first-quarter sales may have dropped by around 15%, he said.

"We've seen the market dropping in units, we've seen it fall in dollars or in real rubles adjusted for inflation," Alekseev wrote. "But I don't recall a time when it was simply falling in rubles - not like this."

He wrote the sector is now losing out to banks, with high interest rates encouraging Russians to move cash into deposits rather than spend on big-ticket items.

Traditionally, around 30% of purchases in the segment were made on credit, Alekseev noted. That share has now fallen below 5%, as access to loans has become increasingly limited.

Statistics show consumer lending in Russia dropped by 21% in 2024 compared to the previous year, as banks tightened approval criteria. The central bank's stricter regulations - including lending caps aimed at curbing household debt - were the main factor behind the decline in late 2024 and early 2025.

Alekseev suggested the drop in demand was driven not only by rising prices or the shift to online marketplaces. "Consumers now have a clear alternative - they can either spend the money or put it in the bank and earn 2% a month," he said.

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DNS is a Russian retail chain specializing in electronics and home appliances, founded in 1998. It also produces goods under several in-house brands. The company says it operates more than 2,000 stores across Russia, with a presence in several CIS countries.