Empirical analysis of foreign investment in the retail trade sector of the Russian Federation

Regional and branch economy

The article justifies that the trade sector is one of the most attractive for foreign investment due to the high speed of capital turnover. Particular attention is paid to the aspects of foreign capital participation in the retail sector of the Russian economy in terms of the investors’ country (or geographical region) of origin. The strategy of expansion of foreign retailers to the Russian market is explored: the conclusion is made about the preferred application of the organic growth strategy in comparison with the strategy of mergers and acquisitions. The problems of participation of foreign retail chains under the conditions of increasing competition are analyzed. Specific aspects of Russian investment in the retail sector of the Russian economy are identified through the application of the offshore business mechanism. There is a conflict in the interpretation of the concept of «Russian retail chains» (with respect to individual federal-level food networks) arising from extensive network application of the offshorization mechanism of business, which, in the context of a change in the property belonging to the business, indicates a virtual change in the status of the companies' capital from Russian to foreign. Using the example of food retail chains, it is shown that competition in the Russian retail market has reached the level of European countries. Conclusions and forecasts are made regarding the prospects for investors' expansion in the retail sector of the Russian Federation. Based on the study of world experience, an opinion is expressed about the possible negative impact of retailers' activities on other participants in the infrastructure of the state's food complex. The practical significance of the work is to apply the findings of the study for making promising managerial decisions by both foreign retailers and executive and legislative authorities at the federal and regional levels.