Serbia Retail Report Q4 2012

The Serbian Retail Report examines the long-term potential of the local consumer market, but flags shortterm concerns about the impact on Serbia’s economic outlook of fiscal consolidation. The report examines how best to maximise returns in the Serbian retail market while minimising investment risk, and explores the impact of the eurozone crisis and declining remittances on the Serbian consumer and on the ability of producers and exporters to realise returns in the short term. The report also analyses the growth and risk management strategies being employed by the leading players in the Serbian retail sector, as they seek to maximise the growth opportunities offered by the local market.

Serbia comes first out of 10 in BMI’s Central and Eastern Europe (CEE) Retail Risk/Reward Ratings, although its Risk rating is comparatively low.

Among all retail categories, consumer electronics will be the outperformer through to 2016 in growth terms, with sales rising 28.6% to US$1.56bn by the end of the forecast period. The consumer electronics sector is a relatively large, underdeveloped market offering growth potential in key digital products groups such as computers (12% penetration), notebook computers (23% CAGR projected), 3G handsets (70% CAGR) and LCD TV sets (18% CAGR).

In the competitive arena, BMI sees upside potential in the fact that, on March 1 2012, the EU awarded Serbia candidate status. Although Serbia is unlikely to join the EU before 2018, the accession process itself will provide the government with a policy anchor and development funds. We also expect investors to be enticed by the prospect of eventual access to the single market.

Over the last quarter, BMI has revised the following forecasts/views: ?? BMI has revised down its forecast for Serbian real GDP growth from 0.4% to 0.2% in 2012 because of a sharp contraction in Q112. The eurozone crisis will weigh on exports and investment, while fiscal consolidation will reduce domestic demand in H212. While 2012 will be a difficult year for Serbia, the economy's long-term potential remains strong, and we forecast trend growth of over 4.0% after 2013.

?? BMI forecasts private consumption to grow by 0.5% in 2012, down from an estimated 2.0% in 2011. Households will be weighed down by high and rising unemployment – we expect it to increase to 25.5% – while the eurozone recession hits inbound remittances, which accounted for 14.8% of GDP in 2010. Serbia Retail Report Q4 2012 © Business Monitor International Ltd Page 6

?? Retail sales recorded their first y-o-y expansion in March (in real terms) for 14 months, expanding by 4.4% y-o-y and then by 3.5% y-o-y in April. Sales were supported by increases in public-sector wages. However, BMI expects this expansion to moderate later in the year as inflation picks up to 4.7% y-o-y by year-end, from a low of 2.7% in April.

Table of contents

Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis

Serbia Retail Business Environment SWOT

Serbia Political SWOT

Serbia Economic SWOT

Chapter 3 - Market Overview

Current Trends

Key Players

Chapter 4 - Industry Forecast Scenario

Consumer Outlook

Retail Growth Outlook

Table: Sales Indicators, -

Organised Retail

Macroeconomic Outlook

Table: GDP By Expenditure, Real Growth %, -

Chapter 5 - 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 6 - Business Environment Outlook

Table: Central And Eastern Europe Retail Risk/Reward Ratings

Serbia’s Retail Rating

Limits Of Potential Returns

Risks To Realisation Of Returns

Chapter 7 - Mass Grocery Retail

Serbia Mass Grocery Retail Industry SWOT

Market Overview

Leading Players

Table: Mass Grocery Retail Market By Estimated Number Of Outlets

Table: Mass Grocery Retail Market – Sales Value By Retail Format

Table: Value Sales Per Outlet, Estimate

Industry Forecast Scenario

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

Table: Mass Grocery Retail Sales Breakdown By Retail Format (% Of Total)

Industry Developments

Chapter 8 - Consumer Electronics

Serbia Consumer Electronics Market SWOT

Market Overview

Computers

Table: PC Sales, -

AV Devices

Table: AV Sales, -

Serbia Retail Report Q

© Business Monitor International Ltd Page

Mobile Handsets

Table: Mobile Communications, -

Industry Forecast Scenario

Table: Consumer Electronics Overview, -

Industry Developments

Chapter 9 - Automotives

Serbia Autos Industry SWOT

Market Overview

Industry Forecast Scenario

Table: Autos Production And Sales (CBUs), -

Trade

Table: Auto Trade, -

Industry Developments

Chapter 10 - Demographic Outlook

Table: Population By Age Group, - (')

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

Table: Key Population Ratios, -

Table: Rural And Urban Population, -

Chapter 11 - BMI Methodology

How We Generate Our Industry Forecasts

Sources

Related research categories

By sector: Retail (in Off-trade)

By market: Serbia (in Europe)