Russia's GDP fell 8.8% in January, year-on-year, though demand for consumer goods continues to grow. But experts say changes in the retail sector are underway.

Oil prices are down and the Rouble is falling. But that hasn't halted demand in Russia's retail sector. According to the Central Bank, consumer spending increased 5.8% in January.

But though the figures are positive, retail sales are not as strong as they were a year ago.  Andrew Howell, Head of Strategy Citi Emerging Markets CEEMEA, says it's a trend across the emerging markets.

“You see problems in the emerging banking sectors. The real reason that consumption has boomed as it has is because people have had access to credit. And now people around the world are worrying about paying off their credit and getting access to new credit is more difficult.”

With personal credit less widely available and real incomes declining, consumers in Russia are now dipping into their limited savings.

This has temporarily enabled consumption to outpace income growth. Viktoria Grankina, Consumer Analyst, Troika Dialog believes consumer spending may remain in positive territory, with an upside for domestic producers.

“For 2009, private consumption can still be in positive territory – perhaps 0 to 1%. Most of the retail spending will be dominated by domestically-produced goods as import substitution does take place.”

Sectors where domestic products dominate – like food retail – are expected to have decent year-on-year performance. But import-heavy areas like electronics and automobile sales have already shrunk – imports falling 34% in January to $10.3 billion.