Transnational Retail Corporations and the Modernization of The

7/29/2019 Transnational Retail Corporations and the Modernization of The

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TRANSNATIONAL RETAIL CORPORATIONS AND

THE MODERNIZATION OF THE ROMANIAN

RETAIL SECTOR

Istvan Egresi

Fatih University

Istanbul, Turkey
http://www.fatih.edu.tr/?logo


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INTRODUCTION

Retail is one of themost dynamic sectorsin Romania;

Romanian food-basedretail market 16billion euro.

Purpose of the paper:to assess the intensityof retail FDI and its rolein the transformation ofthe Romanian retailsector.


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THEORETICAL FRAMEWORK

Two parts:

1. Modernization of theretail sector(supermarketization)

Reardon andcolleagues

2. Globalization of the retailsector Alexander,1997; Wrigley, 2000;

Coe and Hess, 2005;Coe and Wrigley, 2007;Wrigley et al 2005;Wrigley & Currah, 2005;Poole et al, 2002, etc.


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RETAIL TRANSFORMATION IN ROMANIA

1. Interwar period

2. Socialism

3. Transition and Internationalization


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1. INTERWAR PERIOD1930s the retail sector was very fragmented 147,000 stores in

Romania 120 people to a store


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2. DURING SOCIALISMNationalized almost no privately-owned store left

pariah of the economy

Shortage of retail space

Shortage of goods long lines


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THE TRANSITION AND INTERNATIONALIZATION

PERIOD

1990-1995

1996-2002

2003-2008 2009-2012


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EARLY TRANSITION PERIOD 1990-1995

Initial retail privatization

Fragmentation of retail

Very little FDI

First Romanian supermarket 1992


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1996-2002

Modern retail

formats expand

slowly

First international

chains

Market dominated

by traditional

formats


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2003-2008

Rapid expansion of

modern formats

especially

hypermarkets

Internationalization

Changing shopping

habits


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AFTER 2008

Consumptiondecreased by 20%

# of modern storescontinued toincrease 900units

50% modern retail

74,000 traditionalretail units

Domination ofinternational chains


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TRADITIONAL AND MODERN RETAIL

SOURCE: ZIARUL FINANCIAR, NOV. 30, 2011

Year Small

Indep.

Grocerie

s

Kiosks Gas

stations

Discount SuperM HyperM Other Total

2006 74,795 5730 1463 95 298 36 9038 91,455

2007 73,742 5001 1241 139 350 64 10,020 90,557

2008 72,292 4514 1326 210 379 89 10,844 89,654

2009 71,218 3759 1255 292 403 103 11,415 88,445

2010 70,923 3130 1330 323 436 113 11,787 88,042


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TOP 10 RETAIL COMPANIES IN ROMANIA IN 2010 (CASH &

CARRY NOT INCLUDED)

SOURCE: ZIARUL FINANCIAR, NOV. 19, 2011

No. Company Turnover

(mil. Euro)

No. of

employee

s

Owner

1. Kaufland 1112 9993 Schwartz Group (Ger.)

2. Carrefour 933 7123 Carrefour (Fr.)

3. Real 781 7530 Real Group Holding

(Ger.)

4. Rewe 385.3 2075 Rewe Group (Ger.)

5. Auchan 356.7 3184 Auchan Group (Fr.)

6. Cora 327.8 3146 Louis Delhaize Group(Fr.)

7. Billa 272 2752 Rewe Group (Ger.)

8. Mega Image 210 2998 Delhaize Group (Bel.)

9. Profi Rom Food 146.7 1492 Enterprise Inv. (Pol.)

10. Artima 97.3 1068 Carrefour (Fr.)
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REGIONAL DISTRIBUTION OF MODERN RETAIL

UNITS

Region No. of units Population Population/unit % total # of

units

Ilfov &

Bucharest

173 2,043,226 11,810 22.80

Northwest

Region

90 2,495,247 27,724 11.90

West Region 101 1,729,379 17,122 13.30

Center

Region

95 2,251,268 23,697 12.50

Northeast

Region

81 3,148,578 38,871 10.67

Southeast

Region

78 2,399,602 30,764 10.27

South Region 89 2,998,643 33,692 11.72

Southwest

Region

52 1,977,993 38,038 6.85


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REGIONAL DISTRIBUTION OF HYPERMARKETS IN

ROMANIA

Region Carrefou

r

Real Kaufland Auchan Cora Total Pop/

Hmarket

Ilfov &

Bucharest8 4 3 2 3 20 102,161

Northwest 3 5 12 1 2 23 108,489

West 1 4 9 1 1 16 108,086Center 3 3 12 1 0 19 118,487

Northeast 4 2 10 1 0 17 185,210

Southeast 4 3 9 1 1 18 133,311

South 1 2 10 1 0 14 214,188

Southwest 1 1 5 0 1 8 247,249

Romana 25 24 70 8 8 135 141,058


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AFTER 20082009-2010 discounters

2011-2012 supermarkets + convenience stores


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Smaller sizes

Closer to the neighborhoods

Multi-formats Romanian retail becoming more

mature

Moving to smaller towns and even some large

villages

Mergers and acquisitions Slower expansions

Cannibalization of other units

FUTURE TRENDS


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FUTURE TRENDS

Traditional retail units will survive, although

their number will continue to be reduced

Two main reasons for this

Documents

Transnational Retail Corporations and the Modernization of The