For 2014, market players are cautious and, while betting on an increase, they say figures depend on political decisions, as the elections year and possible tensions can either feed or cut Romanians’ shopping appetite.
“It takes political stability, particularly after we saw what happened in Kiev. Consumption will grow in 2014, but it will be influenced by what happens on the political scene and the economic one as well,” said Dan Ostahie, owner of Altex, the largest player on the electro-IT market.
The entrepreneur adds that as funding costs have dwindled and investment, though still low, is on an upward trend, consumption is likely to grow.
However, Ostahie mentions the increase will not be significant given that for consumption to soar it needs 2-3 years with significant GDP growth. Consumption spikes posted in some months are just temporary peaks, believes Dan Ostahie.
Between 2009 and 2013, retail sales posted an overall decline of over 15%. However, toward the end of 2013 shopping appetite started rising, fueled by a growth in consumer lending and the higher purchasing power.
“Consumption will rise this year and the advance will go beyond 0.4% (the level of 2013 i.e.). Moreover, the increase will be more uniform. The first months will see slower growth, but the pace will pick up in the second half of the year. There will be no spectacular pluses, the advance will be a stable one and can be accounted by the rebound of the Romanian and European economies on the one hand, and on a real salary hike on the other one,” says economic analyst Laurian Lungu, managing partner at Macroanalitica.
For a sound and long-term consumption pickup, Romanians need to regain their confidence in the future and this will only be possible when job stability is achieved.
At the same time, salary growth above inflation level will deice consumption, but moves to attract new investment and create new jobs are necessary for this to happen.
“2014 will not be a good year for foodstuff consumption. It is an election year, there will be political tensions with impact over people’s confidence,” says a modern retail executive. He adds that no appetite increase was felt in 2013 and not even December brought a plus.
While non-food retailers say December had a positive impact over 2013 sales, food retailers believe in the last month of the year sales did not go up against the previous year.
Overall, in 2013 modern retail players kept their businesses in the black with the aid of expansion, with more than 200 new stores being opened last year. Expectations are not upbeat for 2014, either.
(English version by Catalina Apostoiu)