“The recession specter is already being felt in the fast-moving consumer goods and retail sectors. The impact on the food segment starts now, in the second quarter, sooner than we expected last year. Consumption habits have already changed, consumers are opting for less expensive products and [retailer] own brands,” said Ionut Pascu, Project Manager of Roland Berger.
The share of food products in terms of total consumer expenses is 32 percent, double the regional average. Shopping budgets have already dropped on the market, as have transportation expenses for trips to the store. People are opting for neighborhood stores. Impulse shopping decreases and the acquisition of textile, furniture, and household appliances is postponed. “If we look at the non-food sector, people are buying less expensive products and especially products being promoted. In the food sector, the trend is still positive, although we are noticing differences between product categories,” said Tjeerd Jegen, the General Manager of Real Hypermarket Romania.
While the Easter holidays normally bring an increase in sales, most players are expecting stagnation at best, compared to the same period last year.
“Based on our estimates, consumption will redirect itself towards less expensive products and a limited shopping basket, or strictly basic products for the Easter meal. For this season, we expect sales similar to those registered in the same period last year,” said the officials of Metro Cash&Carry Romania. The cash&carry segment is most exposed to risk in the current economic context, as most clients are traditional traders who are now facing a decline in sales. The discount segment is the winner in this time of economic downturn. Clients are migrating to inexpensive products and the discount segment offers the most attractive prices. “Considering that consumers will prefer frugal shopping, which requires minimum transportation, discount stores best meet this trend, as they are in close proximity to local neighborhoods,” Pascu added.
