“There is still room for development for modern retailers in Bucharest. The other counties with maximum potential are Prahova, Dambovita, Valcea and Dolj (all of them located in southern Romania),” said Adrian Comaneci, manager of consultancy and research company Contrast Management Consulting &Training Romania.
The company’s survey shows Romania is divided into four categories: counties with maximum potential (four plus Bucharest), counties with high (10), medium (11) and low potential (15). A number of criteria such as geographic structure, population and purchasing power structure were considered in calculating the potential of a county.
One of the maximum potential counties is Prahova, which is the county with the highest population after Iasi (NE Romania). It is also located close to Bucharest and is among those with the highest average net wages in Romania, over EUR300 last year. This is probably one of the reasons why modern retailers have opened more than 20 stores there so far.
Valcea and Dolj counties are the exact opposites, avoided by many of the retailers on the local market or chosen to accommodate only one store. This is one of the reasons why they were rated as “maximum potential”.
Modern retail currently has 1,000 hypermarkets, cash&carry, supermarket and discount stores, and has grown exponentially over the last few years. More than 100 openings are planned for this year alone.
Even though the number of modern retail stores has gone up constantly in recent years, Romania is far from the Western and Central European markets.
Adrian Comaneci says there is potential for 830,000 square meters of stores at the moment, according to the calculations of Contrast Management Consulting & Training Romania. He added that considering the current average floor area of a store, 2,000 square meters, there is a lot of room for growth, i.e. over 400 stores.
The market potential and the drop in land prices were the main factors that made retailers continue to open stores during the financial crisis, when consumer spending dropped by a total of about 20%.
Retailers opened 117 stores a year in from 2005 through 2010, and even more during the crisis, considering they have long-term strategies and the real estate prices were too high.
Modern retail reached EUR8 billion last year, the highest level ever in Romania. It also caught up with traditional retail. Adrian Comaneci says it will continue to grow until it will resemble the situation in Poland, where modern retail accounts for 60% and traditional retail for 40%.
He added the retail market could reach EUR26 billion by 2020, 62% higher than last year.
(English version by Loredana Fratila-Cristescu)