Europe: The Eastern market boosts the revenues of Western retailers

Eastern Europe is providing an increasingly significant part of the revenues of international retail chains. Metro Group is the company with the largest ratio of revenues made in this region, at 28.3 percent, through its cash & carry and Real divisions, according to a study by the PMR market research company.

Central and Eastern Europe generates more than 13 percent of the Belgian
Louis Delhaize group
and the French Auchan company, while the regional divisions of the British Tesco group contribute with 10.5 percent of total revenues, a level similar to that registered by the German Rewe and Schwarz companies.

Multinationals dominate the markets in the region, considering that the top five retailers, in terms of 2007 revenues, in Romania and the Czech Republic are international companies. Also, the top four players in Poland are multinationals, according to the PMR study.

“The role of international retailers in Central and Eastern Europe is evolving. However, holdings of local networks will raise their market share in the long-run, becoming serious competitors for multinationals. This process will take place in Romania also in several years”, explained analysts in the PMR study. Russia and Ukraine register an opposite trend. Local players could lose their leading positions due to lack of know-how and capital, according to PMR.

In Romania, Metro Cash&Carry is market leader in terms of net sales, at €1.59 billion, up 11.3 percent compared to 2006, according to the company. Selgros Cash&Carry, part of the Rewe group, ranks second, with business worth €821 million, 27 percent higher than in 2006, followed by Carrefour Romania, with €866 mln in turnover, a 42.2 percent increase from 2006.

On the whole, businesses of major international retail networks operating in Romania have surged 35 percent in 2007, to some €5.5 billion, according to the Ministry of Economy and Finance. Based on estimates made at the beginning of 2008, the domestic fast-moving consumer goods market should have reached €40 bln, of which some 40 percent would be controlled by modern trade networks.

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