KeysFin estimates: Romanian food-retail market could increase to RON 108 billion in 2022

Aurel Constantin 21/04/2023 | 13:41

The turnover of food retail traders increased by almost 11.7% compared to 2020 and was up by 48% from 2017, at 93 billion lei in 2021. For 2022, KeysFin & RetailZoom analysts estimate an increase close to the record threshold of 108 billion lei, due to the increase in consumption, but especially due to the increase of inflationary pressures.

 

It is a premiere for the business information market and by this partnership with RetailZoom we have created the first complete study based both on financial data and the distribution of the companies’ sales points, but also based on analyses on product categories and brands, which capture the seasonal dynamics of prices. The approach is timely, given the current inflationary pressures, which – though estimated to moderate down this year – we expect to remain significant in the medium term,” said Diana Florescu, KeysFin analyst, one of the most important providers of business information solutions in Romania.

Focus ob local and proximity store chains

Local FMCG retail trade has been decreasing in terms of number of locations in recent years but has consolidated good representation and significant sales shares through regional retail chains and large independent stores. The contribution of this retail channel of Local Key Accounts is significant on national level, at about 10% of the total national food retail sales.

We are used to calling local retailers – traditional trade, and our approach to segmenting this channel proposes two types of businesses: on the one hand, the Local Key Accounts that compete directly with the international players, with large retail chains, and on the other hand small shops, most of which independent, which provide proximity access for daily shopping to population, throughout the country”, said Bogdana Gheorghe, General Manager of RetailZoom.

The local trade represented by local chains and supermarkets, which we call Local Key Accounts, makes up a type of proximity retail channel that is ever more competing with the international retail networks. Numerically, this universe is represented by more than 400 companies nationwide, managing approximately 2,040 stores. The local trade represented by small, traditional stores is much wider, with a universe of about 31,600 companies nationwide, operating approximately 42,000 points of sale, including all store types – food retail stores, universal stores, shops with specialized products areas, according to KeysFin & RetailZoom analysts.

According to RetailZoom’s monitoring, the LKA stores sales registered a value increase of +11.6% in 2022 compared to 2021, a level below the average inflation – an aspect also to be found in the slight decrease of sales per items, of -1.6% versus 2021. Even if the sales performance in local trade was inferior to that of the Romanian IKA for 2022 (+17.2% versus 2021), “the Local Key Accounts do strengthen their position within retail through an enhanced proximity profile – specific not only via the top of the products in the shopping basket, but also via the local or regional assortments,” says Bogdana Gheorghe, General Manager of RetailZoom.

Romanians’ shopping basket: Local versus international

The grocery shopping basket in Local Key Accounts, although relatively similar to the one in International Key Accounts, shows some notable differences in the top categories of products sold – providing it a pronounced profile of proximity retail. Among the similarities in the top 20 product categories one can find raw meat (fresh and frozen), beer, carbonated soft drinks, coffee, bottled water, milk and yogurts, wines – categories that are in the top of both retail channels. In local trade, however, a higher position in the shopping basket is occupied by the categories of processed meat and cheese of variable weight, bread prepacked, nuts & seeds, chips. The difference for modern IKA trade is made by categories such as edible oil, cheese prepacked, eggs and sugar which are at the top, showing the buyers’ preferences for the offers they could find in this channel, according to the KeysFin & RetailZoom study: “The evolution of the Romanian food retail, a record level in 2022”.

For the non-food sector, according to top 10 common categories in local versus international trade (laundry detergent, toilet paper, deodorants, kitchen towels, laundry conditioner, various cleaning products, shampoo, intimate hygiene products), the buyers’ choices show a higher sales position for hand dishwashing detergent, toilet soap, sponges & cloths and insecticides.

The types of products that have grown the most in sales during 2022, in the local independent retail chains, are pet food, groceries products and coffee & coffee drinks.

Higher retail food prices

The size of turnover in retail trade excluding motor vehicles and motorcycles (gross series) increased by 4.4% in 2022 compared to 2021 (for food products, beverage and tobacco trade on an aggregated level, the increase was more than 3 times lower, of 1.4% in 2022 compared to 2021). The turnover in wholesale trade increased by 22% in 2022 compared to the previous year, while the turnover in food, beverages and tobacco increased by 16.9%, according to the data from the National Institute of Statistics.

According to the latest data from the National Institute of Statistics, the consumer price index of food products, which represents 33% of the consumer basket of Romanians, increased in March 2023 by 21.6% compared to the same month in 2022. The highest annual price increases in March 2022, of over 30% in the food category, belonged to sugar (61%), butter (38%), potatoes (36.5%) and eggs, 34% above the level in March 2022.

The KeysFin & RetailZoom study is based on the annual, aggregated financial data reported by companies at the Ministry of Finance (at the end of the period) that had as main activity the 4711 NACE code: retail in non-specialized stores, with the predominant sale of food, beverages, and tobacco.

2021s – segmented and Turnover adjusted data. Only active companies with a turnover of over 5,000 lei have been included, whose main scope of activity is the NACE code 4711. Another 128 relevant companies with other scopes of activity have been added manually.

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