Russia is not the only one affected by its crisis. In fact, many companies in the West are already experiencing the effects of Russia’s declining economy and many more companies are preparing for the worst.
Russia’s currency value is declining and the price of oil continues to deteriorate causing the country’s shaking economy. These factors are also damaging company names resulting in less confident consumers. If the price of oil steadies at a low point then Russia’s GDP is bound to drop by almost 5% in the year 2015. This prediction is bad news for a lot of companies in the West who have tight bonds with Russia.
The decrease in Russian currency has resulted to increase of consumer products prices. Some consumers are already buying before the price goes anymore higher but the overall impact is still the same, it will be a slow year for Western consumer brands. There are already companies who have put their businesses in Russia on hold – Ikea, GM and Apple.
The following are the brands that are most affected by the crisis in Russia:
- Ford. There is a 12% decrease in car sales of the U.S. automaker this year and was forced to cut down 950 jobs last April.
- Volkswagen. Last September, the German car company was forced to stop its production for 10 days due to the declining economy. There was also a 20% in sales this year compared to 2013.
- Carlsberg. Due to slow demand, the Danish beer maker has issued two profit warnings. In the first two quarter of this year, market volume was down by 7%. Carlsberg is supplying the biggest local brewers in Russia thereby causing a 20% decrease in its shares value.
- Adidas. The German sportswear stopped its expansion in Russia and closed down some of its stores. Consumers are spending less and Adidas has 1,100 stores in Russia which are greatly affected.
- McDonald’s. Twelve of the fast food giant’s restaurants were forced by Russian officials to close down early this year. The move was said to be because of sanitary violations but believed to be influenced by politics. The 12 are now back in business but with lower sales.
- Siemens. The company is also suffering from the Russian crisis. It’s 14% decrease in sales is evident to that.