A group of the country's largest retailers said Tuesday that the liquidity crisis has crippled their businesses, forcing them to cut back on expansion and face the prospect of a massive consolidation.

"We have mothballed our long-term projects, cut back on our credit-intensive expansion program and are keeping our fingers crossed," Igor Ladygin, chairman of footwear chain Obuv Rossii, said at Retail Trade in Russia, a meeting of retailers, investors, developers and consultants.

The company, which has a 200 million ruble ($7.7 million) line of credit from Russky Standart Bank, has not been able to use the cash because it is not sure it would be able to repay it, Ladygin added.

Vladimir Kolodyazhny, head of factoring operations at Nomos Bank, cited a crisis of confidence as retailers' biggest problem. "Industry players have completely stopped trusting each other," he said. "Banks avoid lending to each other because of mutual distrust. No one knows who's next."

In a sign of the trouble ahead, X5 Retail Group, which owns the Perekryostok and Pyatyorochka grocery chains, said in a statement Monday that it would delay payments to suppliers who are seeking price increases by an average of 20 days.

"Nothing disastrous has happened yet. The retail sector grew 45 percent on the whole this year," said Alexander Grigoryev, head of markets and corporate finance at investment firm Capital.

But companies selling goods of secondary importance, such as automobiles and household appliances, will likely start to see demand cool, Grigoryev added.

"With the stocks markets down by more than 50 percent, retailers generally can no longer count on foreign investment," he said. "And it's suicidal for any retailer to even think of an initial public offering."

Consultancy PBN said last week that as many as 43 share offers have been canceled or postponed this year in Russia and the Commonwealth of Independent States.

An additional headache is the lack of information for banks, leading to "oversensitivity" in assessing the credit worthiness of clients, Grigoryev said.

"By being both cautious and conservative, banks are indirectly pushing retailers to sell off assets, especially those used as collateral," he said.

Interest rates for retailers have risen as high as 35 percent, Basic Element chief executive Gulzhan Moldazhanova said Monday, Bloomberg reported. "There are industries that have a return to cover that credit, but not many," she said.

And as competition continues to rise for available sources, the retail sector will eventually see some major consolidation, said Alexander Rusnak, chief financial officer of Sedmoi Kontinent.

"The situation is so bad that even relatively big businesses are finding it increasingly tough to raise funds for development," he said.

The company said Monday that it had a 27 percent fall in second-quarter profit, in part because of higher costs to open new stores.

"Discount stores are a good trading model in times of crisis when people economize on most things, including food," he said. "But to be effective, a retailer needs to have more outlets. … We have no such plans as yet."