Romania, second from last in terms of retail expenses

With a budget of 790 euros per capita earmarked for expenses in retail, Romania ranks second from last in the region, only ahead of Ukraine, with 563 euros, and behind another six CEE countries, according to an Euromonitor survey based on 2007 data.

The above-quoted survey puts Romanian food retail at 12.9bn dollars (9.4bn euros) in 2007, namely around 55% of overall retail including drugstores, universal stores and stores that specialise in certain products categories, such as cosmetics, electrical home appliances or apparel. The food market cannot be blamed for the major gaps between Romania and the region average, believes Sorin Minea, chairman of the Romanian Federation of Food Industry Business Owners (Romalimenta). “Romania has been lagging behind Europe in terms of expenses in retail because of autoconsumption and the black market (…),” he states. He also says the food industry is currently overdeveloped in Romania and explains that the weight of current expenses in the wage of a Romanian is very high compared with the European average. Romania is positioned at the bottom end of EU rankings at other chapters, too, such as the level of motorisation. In Eastern Europe, the biggest expenses per capita in retail, worth 2,810 dollars, were registered in the Czech Republic last year, closely followed by Poland, with 2,610 dollars. However, Romanian retail ranks second in Eastern Europe in terms of the growth rate posted in 2002-2007 period, of 29.5%, with the top position being held by Russia, with a 54.6% advance. The big gaps between the development of Romanian retail and of the European one have prompted major international chains to come to Romania. Foreseeing wage hikes and rising requirements from Romanian consumers, major European retailers have operated massive investments in Romania in recent years, driving the weight of modern trade in the FMCG market close to 40% in late 2007. Bucharest ranks second in the top of the most appealing CEE cities for retail investors, being surpassed only by Odessa (Ukraine), in line with a 2007 survey by PMR Publications research and consulting services firm. In the countries’ ranking, Romania comes fourth in the region, after Russia, Ukraine and Poland, and ahead of markets such as Hungary or Bulgaria.