Retail lanscape in Romania is becoming more and more interesting. The year 2013 brought diversification and innovative approaches, as well as a record expansion pace on the proximity stores segment.

Some of the most important retail companies in the market established the big pillars for e-commerce development in FMCG, in 2013. 3-4 years ago, this was an inexisting sales channel. At present time, after  the first online hypermarket launch by Carrefour and first Drive service implementation at Cora hypermarkets chain, we expect to see a fast increase of online sales. The first Cora Drive in Bucharest has an ambitious target: to reach to the weight of 5% in turnover of the real store. Carrefour, as well, set up a high objective: to increase its virtual store assortment to more than 50.000 articles. Its estimates for e-commerce is to reach 5% market share on medium term (3 to 5 years) and to exceed the growth pace registered in Western Europe. Not only food retailers are driving this high speed development: one of the first FMCG virtual stores was created by Interbrands, the no 1 wholesale distributor in Romania; the leading electro-retailer in the market, eMAG, recently diversified its assortment by adding FMCG non-food categories, such as personal care products and pet food.

Innovation in store concepts

In 2013, we saw new formats emerging on the proximity stores segment: Mega Image Concept Store – a flagship store for the leading supermarkets chain in Bucharest, owned by Belgian group Delhaize; AB Cool Food store specialized on frozen food, which offers mainly imported private label products (this is, as well, owned by Delhaize); Profi Mall – a store format created for the commercial spaces placed inside shopping malls.

One of the most suprising innovations in food retail in 2013 was the opening of Profi Ice Store in the centre of Bucharest. About 80 tonnes of transparent ice were crafted to become walls and shelves in Profi ice store, a new 150 square metre store which stocks about 5000 articles, mainly fresh food. The unique store was open for less than one month, until Christmas Eve, and its opening is seen more like a strategy to icrease brand awareness and to improve brand image for Profi. The investment in building and maintaining the ice store was co-financed by Profi foods suppliers which agreed to be Profi partners in this innovative project.

Selgros, a stores chain owned by Rewe Group, implemented in 2013 a new cash&carry concept in Romania by remodelling one of its old stores, in Iasi city - this is a 4 million euro investment. This new concept, with a modern layout, makes the store more friendly with its clients and simplifies the shopping trip inside the selling area.

Talking about remodelling, we must mention, as well, Auchan investments in Real rebranding, after acquiring 20 of the 24 hypermarkets operated by the german company in Romania. At the end of 2013, seven Real stores were already operational under Auchan brand.

Proximity stores are the most dynamic segment

2013 brought a record expansion pace on the proximity sales channel: Delhaize is the first retailer to exceed the 100 new units/year threshold. The number of 2013 openings represents more than one third of the total operational stores of the Belgian group in Romania. Its offensive approach can be seen mainly in the Romanian Capital, Bucharest.

The second most agressive proximity retailer in Romania, in 2013, was Profi. In approx. 18 months, the company owned by Polish investments fund Enterprise Investors inaugurated 100 new commercial units, thus doubling the number of stores.

On the proximity segment, the German Metro Cash&Carry stores chain had a big impact over the last year with its Trader Franchise Programme named LaDoiPasi (2 steps away - in english), launched in 2012. The concept behind the programme designed specifically for the Eastern European market is simple: Metro Cash & Carry acts as a kind of franchiser with an individual advertising campaign geared specifically towards independent traders. They receive, among other things, professional support in upgrading stores, advice on designing assortments and marketing assistance.

LaDoiPasi network is growing quickly in Romania: 600 Metro Cash & Carry customers (small traders) operate at this moment under the name LaDoiPaşi.

2013 brought a premiere in the proximity sales channel: for the first time ever, modern trade exceeded 50% market share in FMCG, in expense of the traditional trade (source: GfK Consumer Panel Services). Small traders feel the increase pressure on prices generated by international stores chain competition. As the down trading trend (migration to cheaper products) was visible on the Romanian market in 2013, discount strategies were the winning strategies in retail in medium&small cities.  It’s the strategy applied by German retailer Kaufland, which is now the leading company in FMCG retail in Romania. It operates 89 discount hypermarkets with a selling area of 3.000-3.500 sq.m., mainly in medium and small cities, and - most probably - it will exceed 100 operational stores threshold in 2014. Last year (2013), Kaufland inaugurated 8 hypermarkets and invested, as well, in the remodelling of some of its old stores in Romania.

Mihail Tanase,

PROGRESSIVE Romania