Arad-based Safilar SA and Coturnix SRL, the local importers of US giant Sara Lee products, last year derived turnover worth 9.3 million euros, up 5% from the previous year. This year, turnover will climb more than 20 percent, to over 11 million euros, following the expansion of international store chains on the Romanian market, and due to a higher promotional budget.
"The growth reported by Safilar, a distributor of non-food products and Coturnix, a food product distributor, stood at 5%. In terms of volume, the real increase in sales was much higher, exceeding 18%," says Alin Dicu, general manager of the two companies.
The gap between the two indicators is grounded on the numerous promotions run last year by most of the companies operating in the field of consumer products.
"The consumer lending boom in late 2002, which continued last year, was not accompanied by a significant increase in the purchasing power. Under the circumstances, that part of the family budget earmarked for the purchase of consumer goods slimmed down. Thus, in order to prevent a slump in consumption, a genuine war of prices was waged on the market by the distributors wanting to retain their market shares," Dicu explains.
Moreover, for a large portion of consumer goods, prices were no longer adjusted to foreign exchange rates and this has hurt the profitability of companies operating in this field.
"ROL-denominated prices were maintained at the level of calculations made against the euro-ROL rate at the beginning of the year, while the foreign exchange rate had gone up 15-16% by the end of 2003," Dicu adds. Therefore, to maintain the profits, companies had to sell more and cut down costs at the same time.
ionut.bonoiu@zf.ro
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