BMI View: Despite a relatively slow catch up with the rest of the EU, Bulgaria's economy is growing its appeal to foreign retailers. International discounters are strengthening their presence in a relatively price-sensitive country; however, new entrances are infrequent. Strong growth in tourism will give a boost to retailers in 2016 as both Western and Eastern European middle-income households travel to the country; the Bulgarian households will increase consumption later into forecast period as the situation in labour market becomes more favourable boosting employment and incomes.
|Headline Household Spending|
|e/f = BMI estimate/forecast. Source: BMI, Eurostat|
Key Views & Developments
Bulgaria's Commission for Protection of Competition continues to improve business environment for retailers: the watchdog fined the leading online retailer eMag for unfair advertising practices and launched a probe into a possible cartel agreement between Kaufland, Lidl, Billa and Metro Cash & Carry.
Foreign groceries retailers are strengthening presence in Bulgaria: Lithuania's Maxima Grupe is taking over 12 stores from Germany's Rewe Group as Macedonia's Kam Market is launching a network in the country where the discounter plans to open 20-25 stores by the end of the year.
Strong tourism numbers could boost retailers' performance in 2016: the number of pre-season international arrivals doubled since last year as the growth is expected to be propelled by German, British, Czech and Polish tourists this year.
In dollar terms, household spending will stay flat this year due to a weaker Bulgarian lev. In local currency terms, consumers are projected to spend 3.9% more than in 2015 this year thanks to the openings of new stores and uptick in wages.
The increase in household incomes is set to persist in the medium term and stimulate non-essentials spending: furnishing and home and alcoholic drinks & tobacco spending will be the two fastest growing categories with CAGR of 7.5% and 7.4% respectively before 2020.
The Bulgaria Retail Report has been researched at source and features BMI Research's independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.
BMI's Bulgaria Retail Report also examines the level of development and potential for growth of the retail sector, the commercial initiatives of major players, changing consumer demographics that influence demand and the regulatory environment. Key sub-sectors include mass grocery retail, autos, over-the-counter pharmaceuticals, computers and consumer electronics.
- Benchmark BMI's independent retail industry forecasts for Bulgaria to test other views - a key input for successful budgeting and strategic business planning in the Bulgarian retail market.
- Target business opportunities and risks in Bulgaria through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
BMI Industry View
Summary of BMI’s key forecasts and industry analysis, plus a discussion of major industry developments and a snapshot of key short-term demand-driving macroeconomic movements.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the retail sector and within the broader political, economic and business environment.
BMI Industry Forecasts
There are four separate 5-year forecast modules in the retail reports. These are:
- Headline Retail Forecast: Total household spending (local currency and USDbn, % growth, % GDP, per capita, per household), spending by retail sector (food & non-alcoholic drink, alcoholic drink, clothing & footwear, housing & utilities, furnishings & home, health, transport, recreation, education, restaurants & hotels, personal care & insurance (local currency and USDbn, % growth, % GDP, % of total spending)
- Retail Sector Forecast: Breakdown of Food, Non Alcoholic Drink, Alcohol, Tobacco, Clothing, Footwear, Household Goods, Furnishings, Appliances, Glass and Tablewear, Household Textiles, Consumer Electronics, Garden Toys and Pets, Home and Garden tools, Personal Care, Personal Effects Spending (USDbn, % Growth)
- Household Income and Numbers Forecast: Number of Households (‘000, % growth); gross income per household and per capita; net income per household and per capita; tax and social contributions per capita; breakdown of household incomes – USD5000+, USD10,000+ USD50000+ (‘000, % of total); labour force, employment and unemployment (‘000, % change)
- Demographic Forecast: Total population; Babies 0-12 months; Young Children 0-4yrs; Children 5-9yrs; Young Teens and Older Children 10-14yrs; Older Teens 15-19yrs; Adults 21yrs +; Young Adults 21-29yrs; Middle Aged 40-64yrs (‘000, % growth, male, female); Urban Population (‘000, % population); Rural Population (‘000, % population).
BMI’s Retail Risk Reward Index
BMI’s Risk Reward Indices provide investors looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Provides a detailed country-specific analysis of the key trends and developments in the retail sector as a whole, as well as an assessment of the main drivers affecting the major retail segments including mass grocery retail, fashion, pharmacies, consumer electronics, home improvement and personal care. The market overview also considers the most effective store formats in a given country and the impact of these factors on the main international and domestic players’ development strategies.
This provides a brief overview of the key players in each subsection of the retail sector including MGR, Fashion, Home Improvement, Consumer Electronics, Pharmacies, and Department Store chains.
The Retail Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.