Romanian retail market highly saturated, A.T. Kearney study shows

Romania has the most saturated modern retail market and is dropping out of the list of the most favorable markets for retail investments, according to A.T. Kearney’s 9th Global Retail Development Index (GRDI).Suffering the biggest drop among European countries, Romania fell five positions in the 2010 GRDI and is currently at the bottom of a 30-developing country ranking of possible locations considered for expansion by global retailers.

In Romania, the recent austerity measures announced by the private sector and by the government will have an additional negative effect on private demand and development opportunities for modern retailers that want to enter the market or to expand their presence in the county.“While Romania still has an average market attractiveness and an average perceived country risk among the markets analyzed in our study, it is also currently considered to be the most saturated market for modern retail when it is compared to its peer group. A higher number of global retail players are already present in Romania compared to other developing countries, the modern retail has a higher share than in other countries, the top players have a higher market share, while retail sales per capita is not expected to grow as happened during the past few years of economic boom,” said Michael Weiss, vice-president of A.T. Kearney. Slow growth, heavy discounting and more fickle shoppers in recession-weary developed markets mean global retailers should be increasingly focused on international expansion, says the firm. Retail executives have learned that core markets such as the United States and Western Europe are not the powerful engines of growth they used to be and the reliance on developing countries for future growth is no longer a “nice-to-have”, but a necessity.

While many retailers are focused on expansion to larger emerging markets like Brazil, India and China, the GRDI found smaller countries including Kuwait, Uruguay, Albania and Macedonia represent increasingly attractive expansion opportunities for international retailers.

Read more about

Andrei Marian, Speedwell, takes the spotlight at Real Estate & Construction Forum & Awards 2024

read more