BMI View: The key indicators for Romania's retail market all reflect positive growth trends over the forecast period, with rapid economic expansion in the country supporting steady gains in average household income rates which in turn will stimulate higher rates of spending in a number of retail sectors. Despite this positive growth, we do note that income levels remain well below the averages seen in developed Western Europe markets, which will undermine the potential for growth in non-essential sec tors. There is also some longer- term risk from the high rate of emigration which is resulting in the shrinkage of the Romanian population and therefore potential consumer market - though this trend is somewhat offset by gains in urbanisation and income levels.
|Headline Household Spending|
|e/f = BMI estimate/forecast. Source: National Sources, BMI|
Key Views And Developments
Romania is expected to record the second fastest GDP growth among the EU states over the medium term, expanding by close to 4% annually between 2016 and 2020. Along with improving labour market conditions and increases to national minimum wages levels and public sector pay, this will drive steady gains in average household income rates.
Private consumption is one of the key drivers of domestic economic growth. We are currently forecasting a healthy increase in household spending in Romania, from USD46bn in 2016 to USD67bn in 2020.
The Romanian retail sector continues to attract investment. Polish investment fund Enterprise Investors has acquired the toy store retailer Noriel which has a presence in 27 cities via close to 50 stores. Enterprise Investors will reportedly invest EUR2mn in the development of the chain.
A number of international retailers are expanding their presence in Romania. Swedish fashion retailer COS is due to open its first store in Romania, located in Bucharest. US watch and accessory retailer Fossil is also opening a store in Bucharest, due to be located in the AFI Palace Cotroceni mall.
The Romania 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 Romania 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 Romania to test other views - a key input for successful budgeting and strategic business planning in the Romanian retail market.
- Target business opportunities and risks in Romania 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.