The aggressive expansion of retailers is causing small local entrepreneurs to drop plans to open convenience stores, with the number of newly established companies that operate non-specialist stores or shops in a market, dwindling every year.
Whereas the number of retail companies accounted for 8.4% in the total number companies created in 2004, in 2007 the percentage reached 4.9%, data from the National Trade Registry Office (ONRC) reveals.
Only 6,946 retail firms operating non-specialist stores were created in 2007, compared with the year before when the number was 40% higher, and double in 2004.
"It was only natural that supermarket expansion would affect convenience stores. I don't think street corner shops will disappear, just that their number will go down," said Liviu Voinea, executive director of the Group of Applied Economies.
Modern retail formats (excluding cash & carry stores) have reached 27.6% of the market, compared with 15.2% in 2005, according to market research company MEMRB.
While supermarkets are expanding, MEMRG data reveals that kiosks retail as a share of overall sales has dropped by two percent to 6.7%, and the share of small shops (20-40 square metres) reached 43.8% in 2007 from 45.2% in 2006.
Although continuing to cover most the market, small shops have minimal growth prospects, being swallowed by the retail heavyweights.
The latest transactions in this field verify the trend: two Mara shops in Focsani have joined the G'Market and Penny networks, three The Best stores in Bucharest have joined the La Fourmi chain, and two Hoffers (Baia Mare) were bought by Billa.
According to ONRC data, more than 5,000 non-specialist retail firms were deleted from the registry last year.
Whereas the number of companies dealing in trade has been dwindling, the construction sector has witnessed the highest growth over the last few years. Whereas 5,000 construction companies were established 2004, in 2007, 13,000 such companies were incorporated. The construction sector achieved an over 30% growth last year compared with a 6% GDP growth, as a result of the surge in the number of office buildings, retail parks or hotels.
"Easy access to loans and the housing shortage on the Bucharest market has surely generated an increase on the construction segment, which has generated a higher number of such companies. I believe this market will calm down," Voinea added. The value of mortgage loans in January 2008 stood at four billion euros, 90% higher than in January 2007 and three times higher than in 2006.
At the same time, one of the most attractive sectors for setting up a new company was freight transportation by road, as a result of logistics outsourcing.
This also makes new players enter the market. Czech logistics and courier service company C.S. Cargo entered the local market, after Turkish transport company Gokbora began operating in Romania the year before.
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