Romania attracts retailers

Citation

(2007), "Romania attracts retailers", International Journal of Retail & Distribution Management, Vol. 35 No. 9. https://doi.org/10.1108/ijrdm.2007.08935iab.001

Romania attracts retailers

In 2006 alone, three Western European retail chains debuted in Romania. Nevertheless, the market is only just beginning to gather momentum. According to PMR's calculations, in 2007 international retail companies are to invest e700m in Romania, which is the largest figure in all the Central and East European countries.

Since, the mid-1990s Poland, the Czech Republic and Hungary have consistently been the most attractive places for retail investments in Central and Eastern Europe. This time, however, has now passed. According to the report “Retailers' strategies in Central and Eastern Europe 2007” recently published by PMR, a research and consulting firm, the per capita value of foreign retailers' investments in Poland will be around e15[1] in 2007, only half of the figure forecast for Romania or Bulgaria. (Figure 1)

Figure 1.

“Central Europe, especially Poland, the Czech Republic and Hungary, and also, to a lesser degree, Slovakia, are becoming saturated,” says Marcin Szaleniec, PMR Analyst and the author of the report. Most international retail chains that had the intention of entering these markets did so in the mid-1990s. As they have now had many years to build up their networks, it is natural that their current pace of growth is not as fast as it used to be.

Nonetheless, Central Europe is still an attractive region for international retail chains. One imminent new player is the German hard discounter Aldi, which is preparing to enter Poland and Hungary. And existing retailers are still expanding their chains, though their mode of operation is changing. Companies like Tesco and Carrefour are no longer focusing on the large, capital-consuming hypermarket format. Instead, they are turning their attention to smaller types of outlet like compact hypermarkets and supermarkets.