Steering 36.6 through the economic downturn

With the economic downturn hammering retail sales, Business RT spoke with the President of Pharmacy Chain 36.6, Jere Calmes, about the impact and the response from Russia’s largest pharmacy retailer.

Business RT began by asking about how the downturn is affecting 36.6's sales.

“36.6 has seen a decline in its sales, as the crisis has strengthened, and we’re seeing a decline in customer activity throughout most of our stores, and it differs from region to region. Where Moscow has been fairly robust, the regions seem to be hit much harder than Moscow.”

What cost saving measure have you implemented?

“In the last 5 years, Russia had a boom of sorts, and everything was going up. So rent prices, salaries were jumping at 20-30% per year, and the way in which we are cutting our costs right now is to go back to landlords and renegotiate rent prices, we are looking at our productivity numbers and making sure that we have the right number of people for the amount of customers and the amount of packages that we sell. I mean of course you take a look at all of your expenses inside the company and try to rationalize them.”

How do you see the pharmaceutical market developing in Russia?

“The market actually is fairly open. Of course our prices for many medicines are regulated, and they’re regulated at the regional level. We have seen some efforts by Governors to cap prices, which I think is incorrect. I think the market should do so. I say that because we are out there finding the best deals for the clients, using our scale to make sure that we offer them the best and most efficient pricing on the market, and if its fictitiously made it could lead to less effective providers out in the market living longer.”