BMI View: Serbia, one of the poorest countries in Europe, will struggle catch up with the rest of CEE in the first half the forecast period. Despite some significant gains, unemployment will remain high. However, household incomes will be recovering, especially after 2016, expanding market potential for retailers. A g rowing middle class will create more stability and larger sales volumes for retail companies.
The Serbian economy, which depends heavily on the trade with the EU and Russia, has been suffering since the onset of the financial crisis. The country's output struggled to make any significant gains and unemployment skyrocketed. Many households make conservative decisions in the retail market as a consequence of a 19.5% unemployment rate, which makes almost a fifth of the country's labour force dependent on social welfare. Economic projections for Serbia indicate that the recovery of the retail market will be delayed: real GDP is projected to rise by only 0.3% and 1.0% in 2015 and 2016 respectively. This year has marked a turnaround in the country's growth and monetary stimulus (the central bank cut interest rates six times in the first three quarters of 2015) will put the economy on the right track: real GDP growth is anticipated to average 4.0% during 2017-2019. As a result, the unemployment rate will start declining more rapidly and is forecast reach 15.0% at the end of our five-year forecast period.
Macroeconomic factors will create a positive outlook for retailers in Serbia. As more workers enter and re-enter the labour market, household income growth is anticipated to pick up. In dinar terms, net household income is projected to grow at a CAGR of 7.2%. More than half of these gains will be erased by increased inflation (expected to hover around 4% mark during 2017-2019), however, even with growing prices net gains will allow the middle class to see its incomes rise considerably. This expansion will be the main propelling force behind a strong...
The Serbia 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 Serbia 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 Serbia to test other views - a key input for successful budgeting and strategic business planning in the Serbian retail market.
- Target business opportunities and risks in Serbia 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.