The collapse of the ruble has forced companies operating in Russia to undertake extreme measures in an effort to remain profitable as the cost of imports skyrockets. And Russians have responded by panic-buying.
Fear over price hikes has sent demand for foreign goods surging as customers try to buy goods before the stores have a chance to raise the cost further. This has led to scenes not seen in the country since the late 1990s as people queued for hours just to get into some shops.
Even large multinational companies have had to take drastic action. Well-known brands such as Apple and IKEA have had to suspend sales and increased prices over recent weeks as they struggle to keep up with the falling value of the currency, while car companies including General Motors, Jaguar, Land Rover, and Audi have all suspended shipments to the country.
Russian shoppers trying to get onto the homepage of the Apple Store over recent days have been met with a “currently unavailable” sign:
The suspension came after the company raised the price of an iPhone 6 by around 25% to 39,990 rubles in an effort to offset the currency falls.
Meanwhile, those looking to do some Christmas shopping at IKEA this week were also disappointed. An attempt to increase prices forced sales of kitchen furniture and appliances on the Swedish retailer’s website to be suspended until Dec. 20 “due to a large number of customers orders”.
Shoppers posted pictures of panic-buying by consumers in Moscow on social media as IKEA was forced to close a number of physical stores.
And here are more photos from the Associated Press showing the fevered activity at an IKEA store on the outskirts of Moscow:
McDonald’s has also moved to raise its prices with the cost of a Big Mac up by 2.2% to about 94 rubles, Bloomberg reports.
Across the country consumer prices having risen around 25% in 2014, due to a combination of the ruble crash and sanctions placed by the Russian government on imports from the European Union. Staples such as pork and sugar have risen by 25%, and the price of fish and seafood has also leapt up by more than 15%.
The pace of the increases has caused a stampede of nervous shoppers trying to buy up as much as they can before retailers hike up prices even further. Russia’s 24-hour news channel RBC TV has been showing the scale of the queues:
Having touched record-highs of 80 rubles to the dollar and 100 rubles to the euro on Wednesday, the currency has strengthened significantly as the government and central bank appear to finally be coordinating their actions. It remains to be seen whether it will be enough to regain people’s confidence in the stability of the currency and reverse the panic of the past few weeks.