Market actors say they felt a rise in sales in December 2016 compared with the year-ago period, and the fiscal relaxation steps and the wage raises made Romanians more willing to spend in the last month of the year.
December, when most people are busy looking for gifts, is the best month for the entire retail business by far, contributing 25% to 30% of the annual revenue of toy or computer and electronics retailers and 13% to 17% of the revenue of the fashion retailers. Grocery retailers make 10% to 12% of their annual sales that month, depending on format.
December is the peak sales month for the food and beverage industries in general, but is even more important for such segments. One of them is the pork segment, as Romanians must have pork for the holidays.
Neculai Apostol, founder of meat processing group Kosarom, says he noticed a surge in sales of pork and meats.
“December was a very good month for our group at least. December brought a 70% rise in revenue, it was better than expected. (…) People are no longer raising pigs themselves, because they realized it costs more than buying the products from stores,” says the entrepreneur who is also the strategy and development director of the Kosarom group.
Kosarom companies, which operate on the pork and poultry market, posted more than EUR50 million revenue together in 2015, according to the latest data available.
Pork sales in December are not representative for the entire food market, and some segments saw moderate growth in the last month of 2016. Grigore Horoi, chairman of the Agricola Bacau group, says December was a regular month.
“The group’s sales in December were in line with the last few years’ trend. Nothing special happened. A higher volume of products entered the market especially from Poland, which left other markets because of the bird flu and came to Romania because the market is more permissive. Things settled and we may say December average was in line with the same time in the past few years,” the manager said.
Overall sales of the major supermarket and hypermarket chains increased 5% to 7% like-for-like in December compared with the year-ago month, the officials of those companies say. Hypermarkets, supermarkets and discount stores are main shopping destinations of Romanian consumers ahead of the winter holidays. Groceries, beverages and cigarettes make up most of the sales (more than 60%).
The most important market in local retail is grocery retail, which stands at EUR17 billion to EUR18 billion a year. Romanians spend this much on food, beverages and care products in both modern retail stores like hypermarkets and supermarkets and in small traditional retail stores. December accounts for 10% to 12% of the annual revenue depending on format. Considering EUR10 billion annual revenue, the ten foreign-held retail chains make some EUR1 to EUR1.2 billion sales in the last month of the year. The small retailers make EUR0.7 billion to EUR1 billion sales.
The rise in sales in the last month of 2016 is because of the several fiscal relaxation steps and wage raises last year. They all drove consumer spending up 14% in January-November, according to the latest data available.
(English version by Loredana Fratila-Cristescu)