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Retail in Central Europe

Market Overview


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Retail sales in Central Europe are constantly growing and in 2005 totalled over an estimated $263 billion in six selected countries with an average annual increase of 7.8%, according to a new market overview by Deloitte. Top retailers in the region include global players Metro, Rewe, and Tesco among others, representing the intensifying competition between large shop formats and discount stores.

Trends in the CE retail market

Retail volume and growth in selected countries in figures
Year Czech Rep. Poland Hungary Slovakia Romania Bulgaria
*) Estimated
Retail sales (USD bln)
2003 21.9 103.2 21.6 10.1 13.3 7.3
2004 25.5 118.5 26.2 13.0 26.9 10.0
2005* 28.4 143.8 28.0 15.3 35.9 11.5
2006* 32.3 153.7 29.6 18.5 41.9 13.5
Retail sales volume growth (%)
2003 3.3 3.6 5.9 4.4 11.2 4.2
2004 3.3 2.5 2.6 4.8 17.6 13.8
2005* 5.0 3.7 1.7 6.8 17.5 11.8
2006* 5.1 3.7 6.6 8.0 9.9 8.7

 

There are currently several major trends in Central European retail which are to a certain extent common to all CE countries:

  • Consumers prefer larger shop formats.
    This change of market structure is most prominent in the Czech Republic, while small businesses in Poland, for example, still keep a market share of about 50% in rural areas.
  • Retail sales are constantly growing.
    Despite last year’s slump in some countries, retail sales in Hungary and the Czech Republic are estimated to triple and double respectively between 2000–2010. The rate of growth will be the fastest in Romania, Bulgaria and Slovakia.
  • Discount stores push super- and hypermarkets out of their position.
    Partly because of lower levels of income, price is still a determining factor for a large part of customers in CE. Discount stores are likely to gain bigger shares of the market and to expand further into more CE countries.
  • Cities are reaching the point of saturation.
    Retail chains are exploring opportunities in rural areas, bolstering sales and converting consumer habits.
  • “Polarization” of customers is continuing.
    The number of shoppers who choose the best quality products, the quality of services provided as well as ease and comfort of shopping instead of the least expensive products and services is increasing.

Market structure in Bulgaria

The Bulgarian economy has recovered from the crisis of 1996/97 and consumer spending has been growing strongly in recent years. The complete privatisation of the formerly state-owned retail system is nearing completion. Although family-run businesses and kiosks are still important in retail distribution, supermarket chains are spreading quickly. As the climate is becoming more attractive and purchasing power grows significantly, investors are likely to make up for the somewhat late entrance of foreign retailers into the Bulgarian market.

Key players in retail are Metro, Cyprus-based company Stambouli, Rewe, Turkish Migros Turk, Greek Ena and Austrian petrol retailer OMV with its chain of petrol stations and mini-markets.

 

For other CE countries’ data and more information read the full-text report attached below.