**Bucharest**: The Romanian retail sector has maintained an 8.7% growth in 2024 despite high inflation. Experts highlight the importance of innovative strategies and a diversified tenant mix in malls, as retailers adapt to market pressures while anticipating future challenges in consumer spending and digitalisation.
In 2024, the retail sector in Romania demonstrated significant resilience, maintaining a growth trajectory that began the previous year. The National Statistics Institute (INS) reported an impressive 8.7% increase in retail trade during the first 11 months of 2024, compared to the same timeframe in 2023. This positive performance occurred despite the persistent challenge of high inflation, which impacted consumer behaviour and spending.
As the retail landscape continues to evolve, companies are seeking innovative strategies to attract consumers to both physical and online marketplaces. This has led to a rethinking of tenant mixes within malls and large retail spaces, with greater emphasis placed on integrating diverse offerings, including fashion, beauty, food, and entertainment.
Geanina Ungureanu, Head of Retail Romania at CPI Property Group, commented on the adjustments made within the retail sector, noting, “In 2024 we focused on diversifying the tenant mix both in the fashion and beauty segments, as well as in food and entertainment. We have signed contracts with renowned and highly anticipated brands… Visitor numbers increased across all our centres.”
The landscape of retail is increasingly characterised by collaboration and stronger supplier relationships, aimed at creating a competitive edge. Cornelia Nicolae, Retail Operations Director at Fashion House Group, emphasised the need for malls to innovate further, stating, “Malls will need to innovate to stay attractive, focusing on entertainment experiences, themed events, and diversified food court areas.” She acknowledged that while certain brands may face challenges, the ability to adapt to changing market conditions remains crucial.
Retailers have collectively faced numerous crises over the past five years—ranging from the impact of Covid-19 to rising energy costs, conflict, inflation, political turbulence, and macroeconomic instability. This volatility has compelled companies to demonstrate remarkable adaptability, adopting flexible pricing strategies and diversifying sales channels. Nicolae remarked, “By diversifying sales channels and adopting flexible pricing strategies, retailers have shown remarkable resilience. However, ongoing economic uncertainty and rising fiscal pressure could force some brands out of the market in the near future.”
Amid rising inflation, driven in part by tax increases to address the budget deficit, there is a growing concern about the impact these changes will have on consumer spending. “It is difficult to make overly optimistic predictions for 2025… consumers are increasingly seeking a balance between affordable prices, quality, and sustainability,” said Nicolae, as the retail sector gears up for challenges ahead.
The retail sector has shown potential for growth, with companies leveraging digitalisation to enhance customer experiences. Raul Filip, Deputy CEO at Altex Romania, stated that the pandemic served as a critical test, yet “retailers managed to maintain steady growth by diversifying sales channels and accelerating digitalisation.” The sector still faces considerable room for improvement, especially in rural areas that present significant growth opportunities.
Metro representatives noted the importance of innovation as Romania remains an unsaturated market with strong investment appeal. They anticipate growth in areas including eCommerce, digitalisation, and mixed-use projects, anticipating ongoing consolidation in a fragmented market characterised by mergers and acquisitions.
Artificial intelligence (AI) is set to redefine the consumer experience in retail as personalised shopping journeys become possible. “AI allows brands to deliver a cohesive, omnichannel shopping experience that feels uniquely designed for each customer,” noted Ungureanu, reinforcing the critical role technology will play in shaping the retail landscape moving forward.
Furthermore, as the middle class expands and interest in international brands grows, premium retailers and outlets are likely to thrive. Nicolae remarked on the necessity for retailers to enhance the shopping experience, particularly in a post-pandemic context where in-store shopping has resurged.
While the hospitality sector struggles with challenges stemming from the pandemic, including skilled labour shortages and inflation, the retail sector is also confronting several significant obstacles. Inflationary pressures affect purchasing power and consumer confidence, while competition from e-commerce continues to escalate. Nicolae highlighted, “Staffing remains one of the biggest issues for retailers these days… fierce competition from e-commerce and high operational costs… are placing significant pressure on traditional retailers.”
Investments in technology and infrastructure are expected to bolster growth in eCommerce, particularly in Romania’s smaller towns and regions where online shopping is becoming increasingly popular.
The landscape ahead for the retail industry appears poised for numerous transformations. With a solid foundation built on past experiences, the sector is equipped to embrace the future’s uncertainties, capitalising on resilience and creativity to meet marketplace demands.
This article was featured in the ‘Industries to Watch in 2025’ main story of the February 2025 issue of Business Review Magazine.
Source: Noah Wire Services
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