The year 2012 will be regarded as the first year of consolidation in Romanian retail, taking into account the transaction in which German retailer Metro sold its Real hypermarkets operated on the local market to French retailer Auchan, in an international transaction impacting four ECE markets. On the other hand, another French retailer, ITM (Intermarché), decided to leave the market closing all the 11 supermarkets it owned in Romania, without finding any buyer.

Supermarkets revival

After years in which it had to gave up market share to the growing segment of hypermarkets, supermarket chains have become more active. In total, 110 supermarkets were opened in Romania in 2012, compared to only 70 units a year earlier. Profi, a store chain managed by Enterprise Investors, a Polish private equity firm, opened 41 stores. Delhaize owned Mega Image opened 37 supermarkets, mostly in Bucharest, while French retailer Carrefour inaugurated 20 Carrefour Market stores. Rewe Group owned Billa also opened 10 supermarkets last year.

Retailers seek local entrepreneurs for convenience

International retailers also focused their expansion on convenience. Thus, Mega Image opened 52 Shop&Go stores, while Carrefour added 15 shops to its Express network. Both retailers are trying to develop their convenience stores in franchise, hoping to attract local entrepreneurs in the business.

The shrinking number of traditional retailers, due to the growing number of modern retail stores, convinced Metro Cash&Carry to develop its own franchise for traditional trade. German retailer launched La Doi Pasi network, joined by 500 independent stores throughout the country until the end of last year. 

Smaller hypermarkets

Kaufland Romania, the leading local retailer, continued its expansion in 2012, opening 10 stores and thus reaching 81 hypermarkets. Keeping the current expansion speed, Kaufland, which is owned by German Schwarz Group, will be able to reach 100 hypermarkets in Romania in the first half of 2014.

Cora, owned by Louis Delhaize, and Auchan, opened two hypermarkets each in 2012. With it’s the two new openings, the retailer launched its Auchan City concept on the local market, with smaller selling space and more focus on food. Each of the retailers (Kaufland, Auchan and Cora) opened a hypermarket in Bucharest in 2012. The other two hypermarket operators, Carrefour and Real, which will be taken over by Auchan, didn’t open any store last year. On the contrary: each of them closed one store. Moreover, Real Romania acquisition to Auchan involved the sale of only 20 of the current 24 Real hypermarkets. The other four stores will be probably closed after the transaction will be finalized. Lidl and Penny Market, the two active discounters on the Romanian market, opened 40 stores last year.

FMCG market trends - GfK Consumer Panel

After 2011, a year when food inflation was high in Romania, 2012 brought a reduction of this phenomenon. However, the lower inflation has not produced sales growth in terms of volume, as retailers and FMCG suppliers have expected. 

Romanian fast moving consumer goods market grew by 2% in value in the first eight months of last year (2012), according to GfK, a research company. Soft drinks and beer sales, more frequent shopping visits and private labels growth and supermarkets, all have contributed to the modest growth.
Compared to 2003-2008 period, when annual sales registered two digits growth in terms of value, in 2010 Romanian FMCG market has first contracted in the last nine years (-5%). Then came 2011, when sales grew slightly, but rather as a result of rising food prices. In 2012, after the first eight months, GfK Consumer Panel Services showed a 2% sales increase in terms of value.

By category, non-alcoholic beverages and beer contributed to this growth, due to summer heat. On the other hand, compared with the first eight months of 2011, food sales decreased in value (-2%). Finally, there is a slight increase in personal care and household cleaning products sales.
Analyzing in depth, we can see that these sales increase comes also from a higher shopping frequency. "It's a specific phenomenon, contrary to the global trend of lower purchase frequency, but Romanians go often shopping, especially for food and drink," explained GfK Romania representatives.
High growth rates were registered by canned vegetables (14%), biscuits (8%), beer and soft drinks (7%). On the other hand, coffee (-7%), cream (-6%), cooking oil (-5%) were among the categories that had a negative dynamic in the first eight months of 2012.
The growth channels were supermarkets and hypermarkets. During January-August 2012 period, supermarkets share increased from 13% to 16% compared to the same period last year, while hypermarkets market share increased from 22% to 23% in the mentioned period. Private label sales also grew in 2012, reaching a 16% share of the total FMCG market, up from 13% in 2011, according to GfK Romania data.

PROGRESSIVE Romania