The advance of the Russian army in Ukraine also forces retailers and multinationals to be on the defensive. Big names such as AB InBev, Carlsberg, Decathlon, Lidl and Metro are now forced to at least partially stop their activities in the country.
Stores and factories closed
Business in Ukraine has come to a partial standstill because of the war: companies give priority to the safety of their employees. As a result, various production sites and stores are closing down. The German food wholesaler Metro has closed 16 of its 26 stores in the country as a precaution.
Some French international retailers are also active in Ukraine: Auchan says it will keep most of its store open for the time being. The five Ukrainian Decathlon stores are closed, as is the webshop. Discount chain Lidl is cancelling its expansion plans in the country, just a year after the retailer had begun with the preparations to start expanding there in the near future.
Brewer AB InBev has stopped production in three breweries, which it operates in collaboration with a Turkish partner. Carlsberg too will cease operations in two breweries. Nestlé has closed three production sites, Coca-Cola keeps its bottling plant closed.
Declining consumer confidence
EuroCommerce, the retail industry’s advocate, calls the invasion a clear violation of international law and asks for strong sanctions against Russia: “We would ask for these measures to be as clear as possible to give legal certainty to companies having to comply with them. The situation is likely to affect our members with operations in Russia and Ukraine, and we would ask for support to our members in looking after their employees in the two countries.”
Inevitably, the war will have major economic consequences, which will also be felt in Western Europe. Ukraine and Russia are two important producers of wheat, maize and vegetable oils, among others. The supply of raw materials and products will be disrupted, energy prices – especially those of natural gas – will rise further. In addition, the uncertain situation is anything but favourable for consumer and business confidence. As a result, it is to be expected that consumption and investments will decline.
