Expert: Retail developers might venture in smaller cities

There are positive expectations for the retail market following last year’s good results, said Liana Dumitru, associate director of the retail agency at Colliers Romania. Fashion retailers saw their sales go up by between 10 and 20 percent in 2015 while the same year they opened on average up to two new stores. This year they are boasting more ambitious plans of between three and five new openings, she said. There are also retailers who aren’t yet present locally, but who plan to enter the local market in the near future.

Many of them are regional players but there are also retailers from Western Europe and the US that are looking at the Romanian market, she added. Recent new entrants include COS, which opened a high-street store on Calea Victoriei, and Forever 21, which will open a store in the future ParkLake mall developed by Sonae Sierra. Developers too have taken notice of the higher sales reported by fashion retailers in particular and there is a tendency to increase rents as result, said Dumitru.

This year two major shopping malls are scheduled for delivery in Bucharest, ParkLake and Veranda, while outside the capital Timisoara and Brasov will be two of the most active regional markets. Asked about what will follow beyond 2016, Dumitru predicted that developers will start turning their attention to smaller regional cities of below 200,000 inhabitants, where they will not necessarily focus on shopping malls but rather retail parks.

Overall, competition is becoming fiercer on the retail market, thereby forcing developers to innovate, argued industry representatives. This becomes even more necessary with the rise of online fashion stores. Nevertheless, the online segment doesn’t pose a threat to local bricks-and-mortar stores, they added. It continues to be very important for consumers to have the full shopping experience when they visit a store, be it because they want to try clothing on or to get advice from shop assistants, said Iuliana Ghimpu, leasing manager at Anchor Group.

This is why physical shops are relevant and will remain relevant despite the rise of online stores, she stressed. Retailers know that and that is why many choose to invest in upgrading their stores, said Oana Vijiala, general manager of AFI Palace Ploiesti owned by AFI Europe. Such facelifts make sense given that they can boost store sales by 20 percent after renovation, she added. If anything, online and offline stores can be complementary, especially as there are still many areas when shoppers simply don’t have access to shopping malls, added Paul Copil, COO, Fashion Days Shopping.