The food retail turnover increased by almost 10% compared to 2019 and was 97% above the 2011 level, reaching the level estimated in last year’s analysis dedicated to this market, of almost lei 130 billion in 2020. For 2021, KeysFin analysts estimate exceeding the lei 142 billion threshold, due to the increased demand but also to the heightened inflationary pressures.
The food retail industry had a total workforce of up to 225 thousand employees in 2020, most of whom worked for PROFI ROM FOOD SRL (a company fully owned by MEP RETAIL LUXCO SARL in Luxembourg), respectively almost 18 thousand people (after an annual advance of 10% in 2020).
The number of companies registered an increase of 1% compared to 2019, but the trend of market consolidation is obvious, the number of companies reporting their financial results being 19% below the 2011 level, reaching 53.6 thousand companies in 2020.
Lidl surpasses Kaufland in the year of the pandemic
LIDL DISCOUNT SRL, a company directly controlled by W E INTERNATIONAL GMBH, became the leader of the food retail market after the largest annual, both nominal and as a percentage, advance of the top 10 (of lei 3.1 billion, respectively by 32%), to lei 12.9 billion in 2020.
The former leader, KAUFLAND ROMANIA SCS fell in the second position after an annual increase of 960 million lei, respectively by 8%, with a turnover of lei 12.8 billion in 2020. The company, controlled directly by KAUFLAND INTERNATIONAL ERSTE GMBH, remained the most profitable player, with a net profit of lei 970 million, respectively 19.7% of the total.
In the third place, in terms of turnover was CARREFOUR ROMANIA SRL with lei 9 billion, respectively 7% of the total, followed by PROFI ROM FOOD SRL (with 6.8% of the total) and MEGA IMAGE SRL which kept its market share of 5.6% of the total in 2020.
The 10 largest companies in food retail had a cumulative turnover of lei 73 billion, generating over 56% of the total turnover in 2020.
2021, focus also on measures to reduce the environmental impact
With the increase in turnover, profitability also rose, so that in 2020, the net profit of the local companies registered an increase of 14% compared to the previous year and was 334% higher than in 2011, reaching lei 4.9 billion.
The first 10 players recorded a cumulative net profit of lei 2.5 billion, which was almost 52% of the total in 2020. The net result (net profit minus net loss) improved significantly from a loss of over lei 1 billion in 2011 to a net positive result of lei 4.1 billion recorded in 2020.
“Since the beginning of the pandemic, in 2020, the food retailers have started large investment projects: from inventory management, extensive information, prevention, and accountability campaigns to spaces’ sanitation efforts, the expansion of store networks, the opening of warehouses dedicated to online sales and to investments in the home delivery area. We are now seeing a greater focus on measures to reduce the environmental impact: from optimizing energy consumption and more careful waste management procedures, to reducing or even eliminating plastic use,” said Diana Florescu, economic analyst at KeysFin, one of the most important providers of business information solutions in Romania.
Higher demand and higher prices
Retail turnover volume excluding the trade with motor vehicles and motorcycles (adjusted series) increased by 10% in 2021 compared to 2020 (for the retail trade of food, beverages and tobacco segment there was an advance more than 2 times lower, of 4.2% in 2021 compared to 2020).
Wholesale trade increased in 2021 by 20% compared to the previous year, while the one in food, beverages and tobacco increased by 11.3%, according to data from the National Institute of Statistics.
The Easter consumer basket of Romanians: more expensive and… smaller
According to the latest data from NIS, the consumer price index of food goods, which represent 33% of the Romanians’ consumer basket, increased in March 2022 by 11.2% compared to the same month in 2021. The highest annual price increases, of more than 20% in the food category in March 2022 were those of potatoes (36.5%), oil (32.3%), maize flour ( 24.4%) and flour, 21.5% above the March 2021 level.
Despite the price increases, Romanians are preparing for Easter and although they purchase smaller quantities of food and are much more attentive to sale offers, given that the income increases have not kept up with the sharp price increases, they manage to enjoy the holiday period and keep their Easter traditions.
Note: The KeysFin analysis is based on the annual, non-adjusted, aggregated data reported by the companies to the Ministry of Finance (at the end of the period), which have as main activity one of the following NACE codes: 4639* (non-specialized wholesale of food, beverages, and tobacco), 4711 (retail sale in non-specialized stores with food, beverages and tobacco predominating) and 4721 (retail sale of fresh fruit and vegetables in specialized stores). All figures are expressed in lei and the data was extracted at the beginning of 2022.
*For the consistency of the analysis, in the case of METRO CASH & CARRY ROMANIA SRL, the 4639 NACE code reported by the company to the Trade Registry, respectively: non-specialized wholesale of food, beverages and tobacco was used and not the one declared as the main scope of activity to the Ministry of Finance, respectively the 4110 NACE code in 2020.
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