International retailers put Romania high up growth drivers” list

Newsroom 26/01/2009 | 15:44

Highest growth for Carrefour in romania on lower European sales
After having almost doubled its sales in Romania in 2007 on 2006 and with four new hypermarkets added in 2007, Carrefour managed to exceed the EUR 1 billion sales threshold in Romania last year. For yet another year, its Romanian subsidiary brought Carrefour the highest increase in its international chain.
Its local sales grew by 45.3 percent based on its network expansion in the country, and at constant exchange rates, the year on year growth was even higher: 51.8 percent.
In 2007, Carrefour took over the Artima supermarket chain, and started re-branding the units under the Carrefour Express supermarket chain throughout 2008.
The deal brought into the Carrefour chain a network of 21 supermarkets which in 2007 expected EUR 95 million in sales. Romania was by far Carrefour's highest growing market, if it were not for the currency volatility in 2008. Like-for-like sales grew in 2008 by 6.5 percent, the third highest increase after Argentina and Brazil.
The local market performances in the Carrefour chain came at a time when sales elsewhere grew at a slower pace then they used to. In the fourth quarter of last year, sales in Europe slowed down, and grew by only 0.5 percent at constant exchange rates, according to Carrefour's latest financial report. The retailer underlines the sharp slowdown in food price inflation and a negative impact from petrol on sales in the fourth quarter of last year, as well as a downturn in non-food spending, especially towards the end of the year.

See stays main growth area for Metro, foresees difficult 2009
The 13 countries in Eastern Europe where Metro Group runs operations were also the main growth driver for the retailer.
The group, which runs Metro Cash & Carry and Real stores in Romania, generated EUR 18.1 billion in sales in Eastern Europe in 2008, EUR 3.6 billion more than in the previous year.Metro Group, which hasn't disclosed its sales in Romania for last year, exceeded the EUR 2 billion threshold in 2007.
In 2008, while Eastern Europe brought a 15.3 percent increase in sales excluding currency effects, Western markets and Metro's mother country Germany accounted for increases of around 2 percent. In Q4, the dynamic development of the first nine months of 2008 slowed notably in Eastern Europe. However, the sales growth remained at a high level and came in at 6.6 percent, or adjusted for currency effects, at 9.9 percent. “2008 was a challenging year for the retailing industry. In the course of Q4 2008, the economic environment drastically deteriorated further. Also, the momentum of Metro Group's business development, especially outside Germany, slowed,” said Eckhard Cordes, CEO of Metro Group. After a challenging year, 2009 is predicted to be tough. “2009 will be a very difficult year. Customers will think twice where and on what they spend their money,” said Cordes. The retail group has put all cost structures under close scrutiny, says its CEO.
After a two-digit increase in 2007 on the previous year, Metro had forecasted growth would continue in Eastern Europe.
“Despite growing global economic risks, Eastern Europe – with the exception of Hungary – is likely to continue to grow at a rate in the middle single digits in 2008/2009. Private consumption in Russia, Ukraine and Romania, in particular, will continue to show strong growth in 2008 and 2009,” the group said in its 2007 financial report, when the economic downturn was not yet in sight. “Once again, Eastern Europe will be Metro Group's fastest-growing region in 2008 and 2009. Russia, Ukraine and Romania are likely to experience the highest real retail growth rates of about 10 percent,” Metro said at the end of 2007.

Romania comes third for Rewe, focus on discounter expansion
Back in 2006, Romania came in fourth among the countries where Rewe operates, based on the EUR 1.05 billion turnover generated from the country. The next year brought Romania up one place on the list, with a turnover of EUR 1.33 billion, a 27 percent increase on the previous year. In terms of sales growth, Romania came third, after Russia, which posted a 42 percent increase in Billa sales, and the Czech Republic, where Billa and Penny brands brought Rewe a 29.3 percent sales increase in 2007.
In Russia, Rewe runs 36 stores generating sales of EUR 182 million, while in the Czech Republic, 350 store brought the group EUR 1.09 billion in sales.
Although the retailer hasn't issued its 2008 results yet, based on recent years' growth and on the expansion of its chain, commentators expect its turnover generated from Romania to get close to EUR 2 billion. Rewe, which runs Billa, Penny and Selgros stores in Romania, had reached 94 units at the end of 2007 in Romania, after ending 2006 with only 65 units on all its brands.
The discounter segment is the most rapidly increasing in size in Romania for Rewe. Late last year, the company's plans were to reach 100 Penny Market units by the end of this year, from the 64 units it had then.

Romania and Indonesia bring highest growth for Mega Image operator
Belgian Delhaize group, which runs 40 Mega Image supermarkets in Romania, is planning to end 2009 with 48 local branches, according to its latest financial statement for 2008. Its 2008 sales in Romania and Indonesia amounted to EUR 201 million, up on 165 million in the previous year. In Indonesia, Delhaize controls 51 percent of Lion Super Indo chain, where it runs 63 stores.
In 2008, the revenues of the rest of the world segment (Romania and Indonesia) amounted to EUR 201.6 million, showing an increase of almost 36 percent versus the prior year at identical exchange rates. During the fourth quarter, revenues increased by nearly 38 percent at identical exchange rates, supported by strong comparable store sales growth, new store openings and the successful banner conversion of the La Fourmi stores, acquired on September 1, 2008, says Delhaize in its 2008 report.

Praktiker sees second biggest increase in romania, affected by RON fall
Do-it-yourself retailer Praktiker, which ran 23 stores in Romania in September last year, saw its sales in the country and in Bulgaria and Poland posting the highest growth rates in absolute terms in the first nine months of 2008. Bulgaria, Greece, Poland and Romania contributed in particular to the improvement of the EBITA, says Praktiker, which posted a EUR 57.7 million EBITA at the end of Q3.
Its net sales in Romania reached EUR 217 million in the first nine months last year, up 19.3 percent in EUR. Like-for-like sales dropped by 1 percent. Praktiker felt the effect of exchange rate volatility, and its sales in Romanian currency posted higher growths, of 31.6 percent in absolute terms, and 9.4 percent in like-for-like sales.
“Due to the fall in Romania's currency, however, the strong growth did not fully translate into euro-denominated earnings,” Praktiker highlights in its latest report on 2008. Both its absolute and like-for-like sales in the local currency posted the second highest increases. Top was Bulgaria, where the DIY firm posted EUR 70 million in sales at the end of Q4 last year.
Out of Praktiker's international markets, Romania holds the highest store chain, bigger than in Poland, where it operated 21 store in Q3 of last year.
For the whole of 2007, Praktiker posted EUR 251 million of sales in Romania, a 21.5 percent like-for-like increase, and an increase of 55 percent, currency adjusted, on 2006. In 2007, Praktiker's forecast was for Romania to remain its main growth country, and it had planned to open four to five new stores both in 2008 and in 2009.

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