Retailers continue to face a challenging environment considering that the national retail turnover for food, beverages and tobacco (FB&T) increased by only 2.9% in 2012 while the non – food sales grew by a mere 1.9% (adjusted series for working days and seasonality) year on year. The results published for the first half of 2013 did not bring much good news to the market either, as the FB&T turnover rose by a marginal 0.5% whereas the non – food by 2.3% comparedto the first half of the previous year (adjusted series). Meantime, the National Bank of Romania reported an annual rate of inflation of 5.25% for the first quarter1.
In 2013, most of the large hypermarkets and supermarket chains reported increases in sales, Mega Image leading the top with a 44% growth year over year. Given the current situation of the market, profit margins were still below the levels reported during the boom years.
EVENTS THAT RESHAPED THE ROMANIAN TRADE LANDSCAPE
It appears that the convenience stores market was unusually active during 2012. First of all, in February, the Bucharest court allowed the insolvency of Mic.ro the chain of convenience stores, controlled by Dinu Patriciu. The company had been accumulating debt towards suppliers for several months, which in turn stopped deliveries of merchandise to the stores2.
On the other side, the Mega Image supermarkets, part of the Delhaize Group, adopted a strong expansion strategy.
According to company reports, the main driver of this extension was the launch of the Shop & Go convenience store format in 20103. While the chain concluded the previous year with 105 stores, they almost doubled the figure in 2012 to 193 outlets. All these led to the fact that, for the first time in Romania, the sales figure of a supermarket chain, namely Mega Image, surpassed that of a hypermarket network (Cora).
Besides Delhaize, the Metro group also became involved in the Romanian convenience stores sector. In March 2012, Metro Cash & Carry Romania launched the “LaDoiPasi” franchise, a program through which the company provides training and advice regarding the product mix and prices. In exchange, the retailers purchase their merchandise from the Metro stores. According to company reports, the Romanian “LaDoiPasi” program counted approximately 500 independent retailers4 at the end of last year.
2012 also saw the largest transaction of the Romanian online retail. The South African group, Naspers, purchased 70% of the shares of the largest Romanian online retailer, Emag. The sale was concluded in July5.
Towards the year end, the sale of Real’s Eastern Europe Operations was announced, with Groupe Auchan designated as the buyer that would take over the operations in Romania, Russia Poland, and Ukraine. The acquisition was subsequently approved by the Romanian Competition Council in the summer of 20136.
LARGE RETAILERS TESTING THE ONLINE ENVIRONMENT
The Romanian retail sector is starting to show an increasing interest towards online sales. Besides the online supermarkets that have been delivering groceries to consumers for the last several years, some large retailers have also launched their own electronic outlets (Metro Cash & Cary and Carrefour). One of the effects of online grocery shopping might be the reduction of impulse purchases. This is due to the fact that the clients are able to choose the products they want to visualize, as opposed to the classic store where they pass through most of the departments before reaching the cash registers.