Croatia Retail Report Q1 2013
The Croatia Retail Report examines the long-term potential of the local consumer market but flags up short-term anxieties about the potential impact on Croatia's economic outlook of a combination of fiscal retrenchment by the Kukuriku coalition government and depressed private consumption.
The report examines how best to maximise returns in the Croatian retail market while minimising investment risk. It also explores the impact of the ongoing sovereign debt turmoil in the eurozone on the Croatian consumer and on the ability of producers and exporters to realise returns in the short term. We also analyse the growth and risk management strategies being employed by leading players in the Croatian retail sector as they seek to maximise the growth opportunities offered by the market.
Croatian per capita consumer spending is forecast to increase by a modest 16% between 2013 and 2016, compared with a regional growth average of 33%. The country comes last in BMI's Central and Eastern Europe (CEE) Retail Risk/Reward Ratings, although it outperforms significantly in the risk component. Among all retail categories, automotives will be the outperformer between 2013 and 2016, with BMI forecasting unit sales to increase by 28% during this period, from 39,169 units in 2013 to 50,176 units by 2016. Croatia is the second-largest car market in the countries of former Yugoslavia in terms of market share and the number of cars per capita.
The country is enjoying some success with niche electric car production. DOK-ING and Rimac Automobili have exhibited electric concept cars at the Frankfurt Motor Show.
Over the last quarter, BMI has revised the following forecasts and views:
?? We have revised down our estimate for Croatia's economic growth in 2012 to -1.7% from -1.5%, and we hold to our 1.0% forecast for 2013. Weak domestic demand as a result of low confidence, fiscal austerity measures and a weak labour market will see Croatia in a recession in 2012. This year, accession to the EU and concurrent funds and an improved outlook for the global economy, which will boost Croatian exports, will see a return to economic expansion.
?? BMI forecasts household consumption to decline by 4.0% in 2012 before rebounding to 0.5% in 2013. The unemployment rate ticked up to 17.7% in August 2012, from 17.5% in July. While we caution that the Croatian economy has a large grey market, offsetting official joblessness rates, this is especially worrying given that July and August is traditionally the peak of the tourist season, which helps to bring down unemployment.
?? These dynamics are borne out in the retail trade index, with the growth in the real index falling by 5.2% y-o-y in July 2012, marking the fifth consecutive month of contraction. BMI sees little prospect for the situation of the Croatian consumer to improve before H213 at the very earliest. Ongoing fiscal austerity measures will see to it that the labour market remains under pressure. While accession to the EU may have a positive impact on sentiment, it is unlikely to boost consumer spending substantially, in our view.
Table of contents
Chapter - Executive Summary
Chapter - SWOT Analysis
Croatia Retail Business Environment SWOT
Croatia Political SWOT
Croatia Economic SWOT
Chapter - Market Overview
Chapter - Industry Forecast Scenario
Retail Growth Outlook
Table: Retail Sales Indicators, 2009-2016
Table: Retail Sales By Key Sector, 2013f
Table: Croatia - Economic Activity
Chapter - Regional Retail Outlook
Central And Eastern Europe Retail Outlook
Table: Central And Eastern Europe Retail Trends, 2009-2016
Table: Central And Eastern Europe Retail Sales, 2009-2016 (US$bn, unless stated)
Table: Central And Eastern Europe Retail Sales By % Share, 2009-2016
Regional Retail Trends
Chapter - Risk/Reward Ratings
Table: Regional Retail Business Environment Ratings
Croatia's Retail Rating
Chapter - Mass Grocery Retail
Croatia Mass Grocery Retail Industry SWOT
Table: Structure Of Croatia's Mass Retail Grocery Sector By Number Of Outlets, 2002-2011
Table: Structure Of Croatia's Mass Retail Grocery Market By Value, 2002-2011
Table: Estimated Value Of Sales Per Outlet, 2011 (US$mn)
Mass Grocery Retail
Table: Mass Grocery Retail Sales – Historical Data & Forecasts, 2009-2016
Table: Sales Breakdown By Retail Format Type (% of total)
Chapter - Consumer Electronics
Croatia Consumer Electronics Market SWOT
Table: PC Sales, 2009-2016
Table: AV Sales, 2009-2016
Table: Mobile Communications, 2009-2016
Industry Forecast Scenario
Consumer Electronics Market
Table: Consumer Electronics Overview, 2009-2016
Chapter - OTC Pharmaceuticals
Croatia Pharmaceuticals Industry SWOT
Industry Forecast Scenario
Table: OTC Medicine Sales Indicators 2008-2016
Chapter - Demographic Outlook
Table: Croatia's Population By Age Group, 1990-2020 ('000)
Table: Croatia's Population By Age Group, 1990-2020 (% of total)
Table: Croatia's Key Population Ratios, 1990-2020
Table: Croatia's Rural And Urban Population, 1990-2020
Chapter - BMI Methodology
How We Generate Our Industry Forecasts
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