Best Year for Modern Retail in Romania
More than 400 grocery stores have opened in 2019, making it the best year in local modern retail ever. Modern retail in Romania started with the arrival Metro Cash & Carry in 1996.
In comparison, the number of stores opened in the previous years stood at 250 to 300. Foreign retail chains therefore invested more than EUR300 million in the opening of new hypermarkets, supermarkets and modern convenience, discount and cash & carry stores this year, according to ZF estimates.
Profi opened the most stores by far, followed by Mega Image. Both of them operate supermarkets and convenience stores. However, the largest budget for new stores was Kaufland’s, a hypermarket operator, which usually opens large stores on plots of its own.
A Kaufland store may therefore cost more than EUR10 million, compared with several hundred thousand euros spent for a small convenience store in a rented space.
The discount store format had one of its best years, too, with more than 50 new stores opened by Lidl, Penny Market and Supeco (Carrefour division).
Overall, the retail chains are stepping up expansion because the economy is still growing, consumer spending is rising, too, and modern retail still has room for growth considering it accounts for a little more than 60% of the overall market, compared with 80% or more in the West.
The nine most valuable modern retail networks in Romania are valued at 37.8 billion lei or almost EUR8 billion, ZF has calculated.
The cumulated value of the almost 3,000 supermarkets and hypermarkets rose by 11% compared with the previous year, but the pace varies with network, the latest edition of the “Top 100 cele mai valoroase companii din Romania” (“100 most valuable companies in Romania”) yearbook shows. This is the oldest ZF product, compiled in partnership with BT Capital Partners since the first edition in 2006. Valuation and advisory firm Veridio has been a part of the project, too, for the last three years.
Nine of the ten modern retail networks in Romania are among the most valuable companies in Romania’s economy. The only one that is not is Cora, the 11-hypermarket chain, which is the smallest player by sales. The grocery retailers are valued at EUR444 million (Penny Market) to EUR1.85 billion (market leader Kaufland). The valuation was done using the 2018 results, a good year the economy as a whole and for retail in particular.
Source: ZF English, December 2019
