“I believe 2015 was a particularly good year,” said Marco Hossl, 40, Kaufland Romania chief executive officer.
Consumer spending increased and Kaufland felt it, Kaufland was repositioned on the local market and its image improved. The food VAT cut helped, too. Moreover, the retailer expanded the range of products it carries and upgraded its stores, Hossl added.
Kaufland developed year after year and opened new stores, so its sales reached EUR2 billion. Retail is a EUR16 billion to EUR17 billion market in Romania, so Kaufland plans to continue expansion by at least six hypermarkets this year, which should require an investment of EUR40 million to EUR50 million, as ZF has previously learnt.
“There is still room for expansion in Romania. If the economy continues to develop at the same pace as in the past few years, if the minimum wage continues to rise and we find suitable land, we will continue development, too.”
Kaufland believes Bucharest has room for 20 stores, if Iasi has room for five, the German executive who took the reins of Kaufland Romania at the beginning of 2015 says.
Consumer spending has increased and customers are moving towards higher priced higher quality products. Consumer spending went up by almost 9% last year, statistics show, driven by the food segment, where it increased by 19% in 2015.
The food VAT cut (from 24% to 9% as of June 1, 2015, i.e.) was important, Marco Hossl says, adding he believes it does not necessarily show in the sales volume but in the shopping cart content. This means consumers no longer buy two chocolate bars but one, which is of higher quality.
Consumer spending, as shown by retail sales, will continue to increase because of the overall VAT drop from 24% to 20% and the rise in the minimum wage. Kaufland, too, has increased the minimum wage it pays and expects 2016 to be a very good year again, when it continues development and raises the minimum wage again, its CEO said.
(English version by Loredana Fratila-Cristescu)