Croatia Retail Report Q4 2011

Croatia Retail Report provides industry professionals and strategists, corporate analysts, retail associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Croatia's retail industry.

The Q411 BMI Croatia Retail report forecasts that the country’s total retail sales will rise by 16% between 2011 and 2015, growing from a predicted HRK80.07bn (US$15.60bn) to HRK92.45bn (US$18.01bn). Contributing to average annual retail sales growth of 1.8% are higher disposable incomes, consumers seeking the choice and low prices offered by foreign and domestic chains, easier access to credit and anticipated EU accession.

Croatia’s nominal GDP in 2011 is predicted to be US$63.2bn, with growth of 1.7% forecast for the year, up from -1.2% in 2010. Average annual GDP growth of 2.1% is predicted by BMI between 2011 and 2015. Although the population is forecast to remain static throughout the forecast period at 4.4mn, GDP per capita is forecast to rise by nearly 23%, reaching US$17,562 by 2015.

The strong tourism industry in Croatia should continue to boost retail sales across all sectors, especially if the developing recovery in the last months of 2010 persists. Croatia is the 18th most popular tourist destination in the world, receiving more than 11mn foreign tourists in 2008 and generating about EUR8bn (US$10bn) in revenue.

The 3% year-on-year (y-o-y) decline in tourist arrivals in 2009 was a result of key tourist groups from the eurozone tightening their belts rather than from any fundamental decline in Croatia’s popularity as a tourist destination. Figures for January-October 2010 show that the number of foreign tourist arrivals was up nearly 5% y-o-y, a rebound on the poor performance in 2009.

After a modest recovery in foreign tourism in 2010, latest data show further improvement in Croatia's tourism industry. During the first four months of 2011 there was robust growth in foreign tourist arrivals, with visitors up more than 14% compared with the same period in 2010 (although there have been sharp swings in monthly growth rates).

In terms of retail sub-sectors, spending on food, drink and tobacco fell between 2005 and 2007 as Croatians began to spend more on aspirational items such as clothing, footwear and furniture, according to figures from the Central Bureau of Statistics (CBS).

Data from the Household Budget Survey by the CBS show that average annual personal consumption per household of food and beverages fell from 33.2% of personal consumption in 2005 to 31.6% in 2007, while consumption of alcoholic drinks and tobacco declined from 4.0% to 3.9%. Consumption of clothing and footwear, on the other hand, rose from 7.7% to 7.9% of personal consumption, while consumption of furniture increased from 5.1% to 5.4%.

Retail sub-sectors likely to achieve steady growth over BMI’s forecast period include over the counter (OTC) pharmaceuticals as the availability and demand for pharmaceutical products both increase. BMI data suggest that OTC pharmaceutical sales will amount to US$0.119bn in 2011 and we forecast an increase to US$0.134bn by 2015.

The automotives sector is also predicted to grow strongly, with BMI forecasting sales to increase by 25% during the period, from 50,098 units in 2011 to 62,600 units by 2015. Croatia is the second largest car market in the former Yugoslavia in terms of market share and the number of cars per capita, with the Croatian Chamber of Economy reporting that 50% of Croatian customers do their shopping mostly by car, particularly when visiting cash-and-carry outlets and hypermarkets.

The consumer electronics sub-sector is forecast to show equally strong growth, with sales likely to grow by 25%, from US$1.03bn in 2011 to US$1.29bn by 2015. The Croatian consumer electronics market offers continued growth potential, particularly in key digital product groups.

Retail sales for the BMI universe of CEE countries in 2011 are forecast to amount to US$1,275bn based on the varying national definitions. Total consumer spending for the region based on BMI’s macroeconomic database is expected to be US$2,185bn. Russia, Turkey and Poland are predicted to account for an estimated 79% of regional retail sales in 2011, a share that is likely to only slightly, to 78%, by 2015. Croatia’s predicted market share of 1.2% in 2011 is expected to fall to 1.1% by 2015. SHOW LESS READ MORE >

Executive Summary

SWOT Analysis
Croatia Retail Business Environment SWOT
Croatia Political SWOT
Croatia Economic SWOT

Business Environment Outlook
Table: Central And Eastern Europe Retail Business Environment Ratings
Croatia’s Retail Rating
Limits To Potential Returns
Risks To Realisation of Returns

Market Overview
Current Trends
Key Players

Industry Forecast Scenario
Retail Growth Outlook
Table: Croatia Retail Indicators, 2008-2015
Table: Retail Sales By Key Sector, 2011f
Macroeconomic Outlook
Table: Croatia Economic Activity, 2008-2015

Regional Retail Outlook
Table: Regional Retail Trends, 2008-2015
Table: Regional Retail Sales By % Share, 2008-2015
Regional Retail Trends

Mass Grocery Retail
Croatia Mass Grocery Retail SWOT
Market Overview
Leading Players
Table: Structure Of Croatia’s MGR Sector – Number Of Outlets, 2009-2010
Table: Structure Of Croatia’s MGR Sector – Value Sales, 2003-2010
Table: Value Of Sales Per Outlet, 2010
Industry Forecast Scenario
Table: MGR Sales By Format, 2007-2015
Table: Sales Breakdown By Retail Format Type, 2010 And 2020 (% of total)
Industry Developments

Consumer Electronics
Croatia Consumer Electronics Market SWOT
Market Overview
Industry Forecast Scenario
Table: Consumer Electronics Sales Overview, 2008-2010 (US$mn)
Industry Developments

OTC Pharmaceuticals
Croatia Pharmaceuticals Industry SWOT
Market Overview
OTC Regulation
Industry Forecast Scenario
Table: OTC Medicine Sales Indicators, 2007-2015
Pharmaceutical Retail

Country Snapshot: Croatia Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2000-2003
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 1999-2004
Table: Consumer Expenditure, 2000-2010 (US$)
Table: Average Annual Wages, 2000-2010

BMI Methodology
How We Generate Our Industry Forecasts
Sources