In three years, Romania has lost the privileged El Dorado statusfor retail and has become a "very challenging" environment forMetro Cash & Carry, the biggest player in Romanian retail, with1.6bn-euro annual sales.
"There is a very challenging economic environment at this momentin Romania, the food and non-food sector are falling. RON declineagainst the euro and banking and real estate problems are beingfelt in retail and we are feeling them, too. I cannot make anyforecasts for 2010 because we lack visibility on the Romanianmarket," Frans Müller, a CEO with Metro Cash & CarryInternational, told ZF in Düsseldorf.
At the conference for the re-launch of Metro Cash & Carry'sprivate labels in Düsseldorf, considerations about Romania wereagain extreme ones, but this time in the negative sense: thecompany's CEO spoke about a very difficult economic environment andabout the lack of predictability on the Romanian market. In a moreupbeat tone, Müller characterised other markets of south-easternEurope, including Turkey and Ukraine, using terms such as"challenging environment" or "not very good".
In 2007, when Metro Cash & Carry saw Romania as a bonanzafor all companies, the Romanian market led the group of countriesthat generated significant growth for Metro Cash & Carry.
Metro Cash & Carry announced the re-launch of its privatelabels, in a year of declining consumption, in which retailers'private labels are gaining ground against established brands asthey provide a cheaper alternative to consumers.
Metro's own private label products reach shelves at 10-20% lowerprices than those of established brands, according to the dataprovided by the retailer.
The move comes several months after the hypermarket network ofMetro group, Real, launched Real Quality brand on the market, whichit is now promoting as its most important brand.
Metro representatives announced the new strategy would doublethe weight of private labels in total sales generated by the cash& carry network on its 30 markets, by 2012.
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