Gary Burrows, Regional Manager, IKEA Centres Russia

Gary Burrows is a regional manager at IKEA Centres Russia. With 29 years of managing malls around the world, he joins IKEA Centres Russia at a time when it is rolling out a major €2bn investment programme to reposition its 14 MEGA branded malls. He is responsible for three regions where MEGA malls aim to become leading meeting places, anchored by IKEA stores, where visitors connect, socialise, experience new things, shop, eat, and naturally feel attracted to spend time.

Gary Burrows, regional manager IKEA Centres Russia

What are the current retail trends that you see as being important?

In Russia, retail trends will be driven by the growth of the Russian consumer market and the positive demographics trends it presents for retailers. Russia is Europe’s largest consumer market with around 146 million consumers. Retail sales turnover stood at €258bn between January 2017 and July 2017, and this figure is set to rise in the long-term thanks to the country’s rapidly growing middle-class. Russia has 15 cities with over 1 million inhabitants and 25 cities with populations of over 500,000 demonstrating the level of opportunity for retailers.

Russian consumer attitudes also mean retail trends in the country are different, however, the growth of F&B and leisure in malls follows classical trends. They are also highly fashion conscious and brand savvy.


What do you believe are the key challenges shopping centres face in the coming years?

It is well documented that the rise in online shopping will mean mall owners have to adjust their asset management approach to maintain footfall and tenant sales. Shopping centres must become more than just places to ‘buy stuff’ and in reality, people are more interested in the experience. In simple terms, they need to offer experiences that cannot be replicated online and adopt an omnichannel approach for a more digital world. After all, we are all social animals and have an inbuilt desire to socialize and group together in communities.


As mentioned, in Russia, long-term consumer demographics are likely to create an environment where the retail market will grow. While this should benefit modern shopping and leisure centre owners, it does mean other developers will increasingly be attracted to the market and competition will increase. Market saturation in Russia as a whole is one of the lowest in Europe with retail space per head being much lower than most other European countries. Which indicates there is room for more retail space on a country level, which will attract developers to regional cities. In recent years, there has been a significant increase in more developed Russian retail markets such as Moscow, which now has more retail space than any other European city with 5,199,000 m² in 2017 according to JLL.


All this means developers need to offer the best leisure and F&B destinations – not just shopping centres - in the marketplace, to compete. It’s why we are investing to upgrade, redeveloping, refurbishing and extend our MEGA malls. For example, we have almost doubled F&B space introducing our new Taste Boulevard concept at MEGA Teply Stan, MEGA Khimki, MEGA Kazan, and MEGA Ekaterinburg. This is following international trends of 10% plus, which is significantly higher than the Russian average currently of 4%.


It means F&B space is becoming an anchor in its own right, and it is already increasing dwell times as eating out becomes a social activity for Russian families.


With the strength of online retail, what do you think the shopping centres need to focus on in order to keep customers coming back?

It is about ensuring malls are diverse leisure, entertainment, cultural and social hubs, where people don’t just come to shop, but to meet friends, try new cuisines, enjoy parks, winter gardens, cinemas, flexible workspace or kids playgrounds. It’s about the emotional connection and the heart of the community. Attracting the best international brands and the newest market entries for our meeting places will keep customers coming back. Working in partnership and co-creating with tenants to ensure they offer customers the best in-class experiential process is also key to the ongoing success of MEGA malls. Driving strong tenant performance is fundamental to everything we do.


What are your thoughts on the rise of flexible retail (pop-ups) and experiential marketing?

Flexible retail space can be an important part of a tenant mix, especially when it is combined with strong F&B and leisure offerings. It helps keep shopping centres interesting and relevant for visitors, as they can be surprised with new retail offers every time they visit. Therefore, flexible retail with events and active mall space is a popular international trend that IKEA Centres Russia is embracing. At MEGA Teply Stan in Moscow, we have recently introduced our ‘Underline’ concept. This exciting multifunctional space includes fashion retail pop-ups and some retailers that have previously been pure-play retailers. Underline as a concept also provides space for fashion shows and flexible working. Since its inception in 2017, the concept has been highly popular with visitors.   


In your opinion, what are the key trends that will dominate the CEE retail market in the coming years?

I expect consumer demographics will be a major driver of retail trends in the region, especially fast-growing middle class. Demand for entertainment, food & beverage and other urban leisure offerings will also rise. Consumer habits and tastes will also develop, and become more sophisticated and this is a trend we are already seeing in F&B. This positive consumer backdrop is likely to mean more new retail space will come to the market, and increase competition for existing shopping centre developers and owners. The rise of online shopping will continue steadily, however, 70% of all people in a recent research stated that they will always want to go somewhere and physically shop in a centre of some kind. However to keep pace with consumer behaviour malls will have to evolve and offer a strongly diverse, socially interesting and culturally centred space that has locally adapted attractions to ensure memorable experiences and emotional connections that cannot be replicated online.

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