In 2016 Romania’s retail growth is above European average

In Romania the retail growth is above average, despite the fact that the buying power remains one of the lowest in Europe.

In 2016, the buying power recorded the biggest increase in Central and Eastern Europe. The drop in unemployment rates and a slight income increase had a positive impact in several fields. In 2016, EU consumers had an average income of EUR 16.153 per person for consumption, rent, savings and pension contributions, and a nominal buying power that increased by 0.7 percent year-on-year. It is important to notice that fluctuations in exchange rates have a negative impact on that, particularly the devaluation of the British pound.

Although it is increasing, the buying power in Romania is among the lowest in Europe, similar to that in the Ukraine, Bulgaria, Serbia, Bosnia-Herzegovina, Macedonia, Albania, and partially, Turkey. However, there are regions where the buying power record a small increase, compared to the average. They include the capital Bucharest, Cluj, Timis, Arad, Alba, Sibiu, Brasov, Prahova and Arges counties.

The GfK study forecasts that retail businesses will increase by 1.5 percent, or even exceed 2 percent, if we exclude Great Britain. Most growth will be recorded in the countries that also performed well last year, such as Romania (around 10 percent) and Hungary (around 6 percent) have dynamic growth rates.

The study also forecasts an increase between 4 and 5.5 percent for Croatia, Bulgaria and the Baltic countries, and in Poland of a little over 5 percent, due to the increase in value of the Polish zloty, as well as thanks to an income increase and price hike. After a two-year decline, the study argues, Greek retailers could see a 1 percent growth.

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The trend that saw Europeans spend less in the retail sector also continued throughout 2016. The figures show that the share stood at 31 percent in 2016, compared to 31 percent in the previous year. Overall, Europeans are investing a bigger share of their income in health, gastronomy and wellbeing.

The GfK study surveyed the European retail market in 32 European countries, analyzing purchasing power, the share of retail spending in overall spending and the profitability of retail spaces. The study also provided a forecast of the turnover of retail in commercial spaces in 2017.