AllBestEssays.com - All Best Essays, Term Papers and Book Report
Search

Market Analysis for Shopping Centers on Romanian Market

Essay by   •  October 27, 2012  •  Research Paper  •  1,641 Words (7 Pages)  •  1,667 Views

Essay Preview: Market Analysis for Shopping Centers on Romanian Market

Report this essay
Page 1 of 7

MARKET ANALYSIS FOR SHOPPING CENTERS ON ROMANIAN MARKET

1. Market Area

1.1. Geographical territory inside which the product is sold

Romania is currently a developing country, with an urbanization rate of 55%, and an average net income of 2304 RON. In July 2009, in Romania there were almost 50 shopping centers, and other 100 were in different fazes of construction.

The shopping centers in Romania have a proportional repartition, being spread all over the country, but with a higher concentration in cities with high density.

Romania has 24 cities that account for more than 100,000 inhabitants, out of which five exceed 300,000 people. The capital Bucharest is the most populated city in Romania and the entire CEE region. In 2009 Bucharest had an official population of 1.94 million inhabitants, while the population living in the metropolitan area is estimated at approximately 2.5 million people when including also unregistered population, students.

Cities in Romania with over 100,000 inhabitants have an average shopping center density of 250-400 sq m GLA/1,000 population. The shopping centre competition is the highest in Suceava, a city of 106,792 inhabitants located in the north-eastern part of Romania. The city has 4 schemes, most anchored by a hypermarket and DIY units, while the shopping density is 1,133 sq m GLA/1,000 inhabitants. Higher densities of 500-700 sq m/1,000 inhabitants are also found in Pitesti, Oradea and Cluj Napoca, while the lowest densities are registered in Galati (97) and Craiova (60).

1.2. Sales structure of the product

The economic recession continued in 2010 to mark every aspect of the retail market, including sales, demand, rental levels, etc. Facing with the second consecutive year of crisis, the retail players seemed more adapted to the market conditions and more prepared to wait for the first signs of recovery foreseen for 2011.

Overall retail sales didn't return to growth and continued with a further 5.5% reduction. As a result the crisis continued in the Romanian retail sector throughout 2010 as sales volumes decreased back to the levels registered four years ago.

The shopping centre development continued at a low pace, few schemes seeing completion. The new stock delivered in 2010 accounted for 184,262 sq m GLA, marking a 39% year-on-year reduction, further to the 56% fall in 2009.

2. Market structure

2.1. Defining the market segment

Shopping centers are addressed to a large market segment, and it consists of people of all ages, and is divided into several categories.

Depending on social-demographic criteria the targeted consumer is formed by people of all ages in urban areas willing to enjoy a day in a place that can satisfy all their needs and desires.

Shopping centers target mainly the urban population, but this doesn't mean that the rural population can't have access to them. For the rural population access to shopping centers is more difficult because they have to use transportation to go from the rural area to the city.

Depending on economic factors the product is mainly addressed to people from the urban environment that have a more stable and a luxurious life due to a greater availability to all the modern facilities (Internet, telephone, television and satellite communication facilities) along with the increasing number of educational facilities.

Shopping centers are addressed mainly to natural persons.

4. Market dynamics

In 2010, the sales went downward and the retail performances continued to affect the demand and the development program for that year. Overall retail sales didn't return to growth and continued with a further 5.5% reduction. As a result the crisis continued in the

Romanian retail sector throughout 2010 as sales volumes decreased back to the levels registered four years ago. The tough market conditions have required owners to be more flexible and revise lease terms in order to attract new entries. To limit the effects of the decreasing footfall and sales, owners continued to adjust rents, give incentives and generally have a positive approach in regard to retailers' needs.

Annual shopping center supply

Year Sq m GLA

2008 700.000

2009 320.000

2010 200.000

* The values are approximated

6. Market conjucture

6.1. GDP dynamics

The Romanian economy continued to suffer in 2010, not

...

...

Download as:   txt (8.5 Kb)   pdf (113.9 Kb)   docx (12.7 Kb)  
Continue for 6 more pages »
Only available on AllBestEssays.com
Citation Generator

(2012, 10). Market Analysis for Shopping Centers on Romanian Market. AllBestEssays.com. Retrieved 10, 2012, from https://www.allbestessays.com/essay/Market-Analysis-for-Shopping-Centers-on-Romanian-Market/35069.html

"Market Analysis for Shopping Centers on Romanian Market" AllBestEssays.com. 10 2012. 2012. 10 2012 <https://www.allbestessays.com/essay/Market-Analysis-for-Shopping-Centers-on-Romanian-Market/35069.html>.

"Market Analysis for Shopping Centers on Romanian Market." AllBestEssays.com. AllBestEssays.com, 10 2012. Web. 10 2012. <https://www.allbestessays.com/essay/Market-Analysis-for-Shopping-Centers-on-Romanian-Market/35069.html>.

"Market Analysis for Shopping Centers on Romanian Market." AllBestEssays.com. 10, 2012. Accessed 10, 2012. https://www.allbestessays.com/essay/Market-Analysis-for-Shopping-Centers-on-Romanian-Market/35069.html.