Romania places 24 out of 30 countries for retail development in 2015

Newsroom 13/06/2016 | 11:53

Romania was placed 24th out of 30 countries in A.T. Kearney’s 2016 Global Retail Development Index (GRDI) study. Our country was not included in the report last year.

The study, looking at 30 countries in terms of retail investments, analyses 25 macroeconomic and retail specific variables and identifies markets which are both attractive in the moment and those which have future potential.

With total retail sales worth USD 45 billion last year, Romania’s development has been driven by steady GDP growth and decreased corruption.

“Although the country’s population is 45 percent rural, modern trade is developing fast. Major retailers are expanding aggressively with smaller formats. One of the market leaders, Carrefour, acquired the Billa chain of supermarkets, and Mega Image, the leading supermarket in Bucharest, has focused on opening flagship stores to strengthen its brand equity among middle- to upper-class shoppers,” the GRDI shows.

In 2015, more than 150,000 square meters of shopping center space opened in Romania, and this year will bring continued expansion, with five more malls being planned for opening this year, including NEPI’s Shopping City Piatra Neamt and Prodplast Imobiliare’s Veranda Mall in Bucharest. Market entrants that have opened in these new malls or are expected to do so include Forever 21, Lanidor, Tezenis, Michael Kors, Kiehl’s and Chanel.

Smartphones and laptop sales are boosting electronics retail. Players such as Flanco (30 new stores) and Altex (shifting sales focus toward e-commerce) are expanding aggressively. Do-it-yourself, on the other hand, is consolidating as it is currently crowded by about 10 existing players.

Scale challenges remain, as McDonald’s considered the market too small for maintaining a direct presence. In 2015, the network of 67 stores and 10 percent market share, sold its Romanian operations to a franchisee.

FG-Global-Retail-Expansion-at-a-Crossroads-01

Table courtesy of A.T. Kearney

For this edition, four out of the top five countries are in Asia. China takes the top spot despite its continued economic challenges and transformation. India’s huge market potential, fast growth, and improved ease of doing business move it into second place.

On the other end of the spectrum are regions where a year of struggles have hurt retail. Latin America is grappling with political unrest and economic deceleration. Russia is still burdened by international sanctions and a deepening financial crisis. The Middle East is adjusting to cheap oil and ongoing regional conflicts.

Natalia Martian

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