The local retail market has had a difficult 2021 amid the many ups and downs of the covid-19 pandemic, even as Romanians have largely embraced the new normal. With a moderate growth recorded this year, e-commerce continues to be one of Romania’s star sectors. However, despite having a huge potential to grow in the coming years, online shopping will continue to complement the offline experience, and not eliminate it altogether, because the consumer experience and the human interaction factor are more important now than they’ve ever been.
By Anda Sebesi
2021 was a more challenging year than the previous one due to a combination of stressors: the ongoing pandemic and restrictions, rapid changes in consumer behaviour, increased psychological pressure, economic and political uncertainty, changes in the supply chain, the energy crisis, and rising inflation. This mix of factors has created a lot of pressure and amplified unpredictability, even in the short term.
As a result, the volume and value of sales have fluctuated significantly, rising during periods with fewer restrictions and dropping once the pandemic hit new peaks. “It was quite a predictable evolution and it will unfortunately generate big gaps in the economy through a domino effect,” says Catalin Pozdarie, CEO at Hervis Sports Romania.
But Adrian Ariciu, CEO at Metro Romania, says that the slight increase in sales this year has led to a relatively stable level for the local retail market. He adds that Romania has shown a high appetite for consumption in recent years, especially on the food segment, and hence he expects this upward trend to continue in the future, but at a lower pace. “There is a great opportunity to create added value in locally processed products,” says the CEO of Metro Romania.
The company ended last year with a turnover of RON 6.1 billion, a 5 percent increase from 2019, and aims to post another one-digit growth next year. Currently, hospitality customers generate 20 percent of Metro Romania’s total sales, resellers account for 60 percent, while the remaining 20 percent comes from small enterprises (offices, associations, kindergartens).
Also this year, Metro Romania has continued to rapidly expand its LaDoiPasi franchise network, reaching 1,630 stores nationwide. “As a result, it is the largest network of independent stores in Romania right now and we want to expand to 2,000 stores by 2023,” Ariciu says, adding that this expansion is the result of the development of convenience retail, which performed well during the pandemic.
According to Sebastian Mahu, head of asset management at Iulius, 2021 will be well above 2020, but still below 2019, following the impact of the restrictions which are still in place. “Although there were times during the year (spring to summer) with footfall and sales results that were comparable to the pre-pandemic period, November 2021 saw a 25 percent decline from the summer levels, following the implementation of green certificate-based access to shopping centres,” he says.
This year, the company has focused on supporting the local entrepreneurs and producers in its portfolio, who are finding it harder and harder to cope with the extended crisis period. “This year we launched the Go Local programme, helping local entrepreneurs enter Iulius projects with rent-free periods and advertising packages,” Mahu says. …….