Romanian supermarkets grow up

The first development moves of the large distribution networks are currently taking place in Romania, which will lead to a restructuring of foodstuffs retail in the medium term, Gerd Horig, the general manager of the Federal Patronage of German Foodstuff Trade, last week stated in Warsaw.

The interest in Romania derives from its being the second-largest domestic market in Central and Eastern Europe, although its Gross Domestic Product is still displaying a fluctuating evolution.

As the negotiations for European Union accession are accelerating, larger subsidies are expected to be allotted to Romania, which will trigger a significant economic modernisation, Gerd Horig added.

In 1996, Metro Group was the first foreign company having entered the Romanian market and is currently dominating the cash-and-carry field. In 1999, another western competitor, Billa, held by Rewe, came to Romania and the competition subsequently tightened.

When incomes shrank in 1992, the population’s purchasing power dropped, while the foodstuff prices skyrocketed. Therefore, modern distribution groups saw their development plans hampered, so they are still reluctant when it comes to sustained expansion in Romania, Gerd Horig stated.

Delhaize, Metro, Rewe and Milgros are the four such companies having entered the Romanian market so far. With a privatisation share of more than 80%, Romanian retail is the economic branch where privatisation is most advanced. However, it is still split, the German official added.

“Of a total of 170,000 foodstuff retail stores, there are only few chains of subsidiaries managed by small companies, privately held”, Gerd Honig went on to say.

The competition will tighten when Carrefour and Leclerc enter the market as they have planned. For the large companies in this field, the expansion on markets with great potential is a simple matter of development.

“The internationalisation and globalisation in the food industry have become common issues in the development strategy of large store chains. Six of the top ten food retailers (Carrefour, Metro, Ahold, Auchan, Intermarche and Rewe) have their head offices in Europe. They hold a worldwide oligopoly of companies operating in the commerce area and the figure of 150 billion euros in turnover will soon become a rule,” Gerd Horig concluded.