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The aggressive expansion of supermarket 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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