Premium
The domestic food retail turnover could exceed 142 billion RON in 2021 amid the advance of consumption, but also of heightened inflationary pressure, shows a KeysFin survey.
"Food retail turnover increased by almost 10 percent compared to 2019 and was 97 percent above the figure of 2011, hitting the almost 130 billion RON estimated for 2020. For 2021, KeysFin analysts estimate that the threshold of 142 billion RON will be exceeded against the background of the advancing consumption and heightened inflationary pressures," the document reads.
The total headcount in the food retail industry was of roughly 225,000 in 2020 (up 10 pct YoY), of whom almost 18,000 worked for the Profi retailer.
The number of companies increased by 1 percent compared to 2019, but there is an obvious market consolidation trend as the number of companies that posted their financial results is 19 percent lower than in 2011, at 53,600 in 2020.
Retailer Lidl Discount SRL, a company directly controlled by We International GmbH, became the leader of the food retail market after posting the largest annual advance in nominal and percentage terms in the top 10 ranking (3.1 billion RON and 32 percent, respectively) to 12.9 billion RON in 2020. Former leader Kaufland Romania slid to the second position after an annual increase of 960 million RON, respectively 8 percent, with a turnover of 12.8 billion RON in 2020. Third by turnover was Carrefour Romania SRL with 9 billion RON, or 7 percent of the total, followed by Profi Rom Food SRL (with 6.8 percent of the total) and Mega Image SRL which kept its market share of 5.6 percent of the total in 2020.
The top 10 largest food retail companies had a cumulative turnover of 73 billion RON, accounting for over 56 percent of the total market turnover in 2020.
According to KeysFin analysts, profitability increased along with the turnover, so that in 2020 the net profit of the companies in the sector was 14 percent higher compared to the previous year and 334 percent up from 2011, standing at 4.9 billion RON.
The top 10 players had a cumulative net profit of 2.5 billion RON, which was almost 52 percent of the 2020 total.
"Since the outbreak of the pandemic in 2020, food retail companies have embarked on extensive investment projects: from inventory management, extensive information campaigns, prevention and public accountability campaigns and efforts to sanitize spaces, to expanding store chains, opening dedicated warehouses for online sales and investments in home delivery services (direct or indirect). We now see a growing focus on environmental impact reduction measures: from optimizing energy consumption and more careful waste management to reducing or even eliminating the use of plastic," said KeysFin economic analyst Diana Florescu.
Retail trade (adjusted terms), except for trade in motor vehicles and motorcycles, increased 10 percent in 2021 compared to 2020. Aggregate trade in food, beverages and tobacco was just 4.2 percent in 2021 compared to 2020, more than twice lower than the year before.
According to the latest statistical data cited in the said survey, the foodstuff consumer price index, which represents 33 percent of the Romanians' consumption basket, was 11.2 percent higher in March 2022 compared to the same month of 2021. The foodstuffs to see the steepest annual price increases in March 2022, of over 20 percent, were potatoes (36.5 pct), edible oil (32.3 pct), corn (24.4 pct) and flour (21.5 pct).
The KeysFin survey is based on annual, unadjusted, aggregated financial data reported to the Finance Ministry by companies operating mainly in non-specialized wholesale of food, beverages and tobacco, retail of food, beverages and tobacco in non-specialized stores, fresh fruit and vegetables retail in specialized stores.
KeysFin offers 100 percent digitized solutions for checking on the business environment, with up-to-date financial and legal data, reports, graphs and analyzes about companies in Romania and abroad, aimed at reducing commercial risk. With a portfolio of over 700 clients, KeysFin is one of the most important providers of business information solutions in Romania.
