Croatia Retail Report Q1 2012
Business Monitor International, December 2011, Pages: 55
The Q112 BMI Croatia Retail Report forecasts that the country’s total retail sales will rise by 13% between 2011 and 2015, growing from a predicted HRK79.52bn (US$16.12bn) to HRK89.47bn (US$18.13bn). Contributing to average annual retail sales growth of 1.2% 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$66.60bn, with growth of 0.3% forecast for the year, up from -1.2% in 2010. Average annual GDP growth of 1.4% 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 9%, reaching US$16,447 by 2015.
The strong tourism industry in Croatia should continue to boost retail sales across all sectors. 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 2009 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 32.6% in 2009, while consumption of alcoholic drinks and tobacco declined from 4.0% to 3.6%. Consumption of furniture, on the other hand, increased from 5.1% to 5.2%.
Research by retail consultancy RegioPlan demonstrates that the average Croatian spends far more on clothes per year (EUR930) than their counterparts in Slovakia (EUR750), the Czech Republic (EUR580) and Poland (EUR520), Balkans.com reported in October 2011.
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$0.091bn in 2011 and we forecast a 23% increase to US$0.112bn by 2015.
The automotives sector is also predicted to grow strongly, with BMI forecasting sales to increase by 18% during the period, from 48,695 units in 2011 to 57,388 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 17%, from US$1.01bn in 2011 to US$1.18bn 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$1,281bn based on the varying national definitions. Total consumer spending for the region based on BMI’s macroeconomic database is expected to be US$2,188bn. Russia, Turkey and Poland are predicted to account for an estimated 79% of regional retail sales in 2011, a share that is likely to remain fairly stable through to 2015. Croatia’s predicted market share of 1.3% in 2011 is expected to fall to 1.2% by 2015.
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
Consumer Outlook
Retail Growth Outlook
Table: Croatia Retail Indicators, 2008-2015
Table: Retail Sales By Key Sector, 2011f
Macroeconomic Outlook
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
Industry Developments
Consumer Electronics
Croatia Consumer Electronics Market SWOT
Market Overview
Industry Forecast Scenario
Table: Consumer Electronics Overview
Industry Developments
OTC Pharmaceuticals
Croatia Pharmaceuticals Industry SWOT
Market Summary
OTC Medicine Market Forecast
Table: OTC Medicine Sales Indicators 2007-2015
Pharmaceutical Retail
BMI Methodology
How We Generate Our Industry Forecasts
Sources
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