Boston, MA -- (ReleaseWire) -- 07/15/2014 -- A relatively immature retail sector will continue to provide investors with opportunities to secure 'catch-up' growth, while February retail sales data also provides cause for optimism, and as such, risks to our retail forecasts are weighted to the upside. Nonetheless, a modest economic growth forecast for 2014, still-high unemployment levels and a very weak demographic picture continue to dominate our forecasts and ensure that Bulgaria remains at the foot of our regional Risk/Reward Ratings for the regional sector.
In line with the upside risks that our Country Risk team notes to our current Bulgarian real GDP growth forecast of 1.6% in 2014, we note upside risks to our household spending forecasts. February retail sales data underscores this point, with year-on-year retail sales growth coming in at 9.2%, an eleventh consecutive month in positive territory and the highest growth recorded since mid-2012. The stronger performance of non-food retail sales versus food (growth of 13.8% and 8.5% respectively) highlight that non-essential retail is performing robustly.
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Another key development of note this quarter is ongoing consolidation activity in the country's retail sector. Within grocery retail, AP Mart has announced that it is to acquire 54 Piccadilly and Piccadilly Daily supermarket and convenience stores from Belgium's Delhaize Group, while within home improvement retail, Videolux Holdings is to add to its consumer electronics presence in the country with the acquisition of Germany's Praktiker's nine DIY stores.
Key BMI Forecasts
- Total household spending in Bulgaria is forecast to increase by 22.6% to BGN59bn in 2018.
- We expect household goods expenditure to witness the strongest growth over this forecast period, expanding by 34.1% in local currency terms, with spending on household appliances the primary driver.
- Food and beverage spending will experience the most modest growth, expanding by only 14.5% in local currency terms, as strong...
The Bulgaria Retail Report has been researched at source and features Business Monitor International (BMI)'s independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.
BMI's Bulgaria Retail Report also examines the level of development and potential for growth of the retail sector, the commercial initiatives of major players, changing consumer demographics that influence demand and the regulatory environment. Key sub-sectors include mass grocery retail, autos, over-the-counter pharmaceuticals, computers and consumer electronics.
- Benchmark BMI's independent retail industry forecasts for Bulgaria to test other views - a key input for successful budgeting and strategic business planning in the Bulgarian retail market.
- Target business opportunities and risks in Bulgaria through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
BMI Industry View
Summary of BMI?s key forecasts and industry analysis, plus a discussion of major industry developments and a snapshot of key short-term demand-driving macroeconomic movements.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the retail sector and within the broader political, economic and business environment.
BMI Industry Forecasts
There are four separate 5-year forecast modules in the retail reports. These are:
Headline Retail Forecast: Total Household Spending, (US$bn and local currency, % growth, % GDP, per capita, per household); Spending by Retail Sector for: food and non-alcoholic drink, alcoholic drink, clothing and footwear, housing and utilities, furnishings and home, health, transport, recreation, education, transport, restaurants and hotels, personal care and insurance (US$bn and local currency, % growth, % GDP, % of total spending)
Retail Sector Forecast: Breakdown of Food, Non Alcoholic Drink, Alcohol, Tobacco, Clothing, Footwear, Household Goods, Furnishings, Appliances, Glass and Tableware, Household Textiles, Consumer Electronics, Garden Toys and Pets, Home and Garden tools, Personal Care, Personal Effects Spending (US$bn, % Growth);
Household Income and Numbers Forecast: Number of Households (?000,% growth); gross income per household and per capita; net income per household and per capita; tax and social contributions per capita; breakdown of household incomes ? US$5000+, US$10,000+ US$50000+ (?000, % of total); labour force, employment and unemployment (?000, % change)
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