Romania Retail Report Q4 2012

The Romanian Retail Report examines the long-term potential of the local consumer market, but flags up short-term concerns about the impact on Romania’s economic outlook of the domestic banking sector's exposure to deleveraging Western European parent banks.

The report examines how best to maximise returns in the Romanian retail market while minimising investment risk. It also explores the impact of renewed uncertainty over the future of the eurozone on the Romanian consumer and on the ability of producers and exporters to realise returns in the short term. We analyse the growth and risk management strategies being employed by the leading players in the Romanian retail sector as they seek to maximise the growth opportunities offered by the local market. Romanian per capita consumer spending is forecast to increase by 35% to 2016, compared with a regional growth average of 44%. The country comes ninth out of 10 in BMI’s Central and Eastern Europe (CEE) Retail Risk/Reward Ratings (RRRs), although it outperforms slightly on the rewards side.

Among all retail categories, mass grocery retail (MGR) will be the outperformer through to 2016 in growth terms, with sales forecast to grow by nearly 45%, compared with 22.3% for overall food sales. MGR is predicted to expand its share of the total food market to 58.6% by 2016, when value sales should reach US$12.77bn.

In the competitive arena, BMI sees upside potential in the fact that large-scale infrastructure improvement is ongoing and that Romania will receive substantial influxes of EU funds and loans over the coming years. The EUR7.1bn (US$9.2bn) investment into rural development during 2007-2013 forms part of the national budget.

Over the last quarter, BMI has revised the following forecasts/views: ?? BMI has revised down its forecasts for Romanian real GDP growth in 2012 and 2013. We now expect growth of 1.0% and 2.1% in 2012 and 2013 respectively, from a previous forecast of 1.4% and 2.3% growth. Renewed uncertainty over the future of the eurozone will weigh on Romania's trade and investment flows, while the domestic banking sector's exposure to deleveraging Western European parent banks is set to limit credit availability and weigh on headline growth.

?? BMI has moderately revised down its forecast for 2012 private consumption growth to 2.6%, from 2.8% previously. This remains higher than the 1.3% growth registered in 2011, and we reiterate our expectation for less austere fiscal policy to feed through to higher private Romania Retail Report Q4 2012 © Business Monitor International Ltd Page 6 consumption. We have similarly revised down our 2013 private consumption growth to 3.8%, from 4.0% previously.

?? BMI has revised down its short-term annual growth forecasts for foreign tourist arrivals to slight negative growth in 2012 of -1.2% (from -0.5% previously), with positive growth of 2.3% in 2013. The long-term outlook for arrivals is favourable, bolstered by the stimulus provided by the EU, the establishment of tourism promotion offices overseas and an enhanced marketing programme to boost interest in the country.

Table of contents

Chapter 1 - Executive Summary

SWOT Analysis

Romania Retail Business Environment SWOT

Romania Political SWOT

Romania Economic SWOT

Chapter 2 - Market Overview

Current Trends

Key Players

Chapter 3 - Industry Forecast Scenario

Consumer Outlook

Retail Growth Outlook

Table: Retail Sales Indicators, -

Macroeconomic Outlook

Table: Economic Activity, -

Chapter 4 - Regional Retail Outlook

Central And Eastern Europe Retail Outlook

Table: Central And Eastern Europe Retail Trends, -

Table: Central And Eastern Europe Retail Sales, - (US$bn, unless stated)

Table: Central And Eastern Europe Retail Sales By % Share, -

Regional Retail Trends

Chapter 5 - Business Environment Outlook

Table: Central And Eastern Europe Retail Risk/Reward Ratings

Romania’s Retail Rating

Limits To Potential Returns

Risks To Realisation Of Returns

Chapter 6 - Mass Grocery Retail

Romania Mass Grocery Retail Industry SWOT

Market Overview

Leading Retailers

Table: Structure Of Mass Grocery Retail Sector By Estimated Number Of Outlets

Table: Structure Of Mass Grocery Retail Sector – Estimated Sales Value By Format

Table: Structure Of Mass Grocery Retail Sector – Average Sales Value Per Retail Outlet –

Industry Forecast Scenario

Table: Mass Grocery Retail Sales By Format – Historical Data & Forecasts

Table: Mass Grocery Retail By Format (%)

Industry Developments

Chapter 7 - Automotives

Romania Autos Industry SWOT

Market Overview

Table: Romania Car Sales

Electric Vehicles

Used Vehicles

Romania Retail Report Q

© Business Monitor International Ltd Page

Table: Top Used Car Makes

Suppliers

Industry Forecast Scenario

Table: Autos Sales, Production And Trade, -

Sales

Production

Trade

Chapter 8 - OTC Pharmaceuticals

Romania Pharmaceuticals And Healthcare Industry SWOT

Market Overview

Industry Forecast Scenario

Table: OTC Medicine Sales By Subsector, -

Table: OTC Medicine Sales Indicators -

Chapter 9 - Demographic Outlook

Table: Population By Age Group, - (')

Table: Population By Age Group, - (% of total)

Table: Key Population Ratios, -

Table: Rural And Urban Population, -

Chapter 10 - BMI Methodology

How We Generate Our Industry Forecasts

Sources

Related research categories

By sector: Retail (in Off-trade)

By market: Romania (in Europe)