Long dominated by small stores, Albania’s retail market could increasingly a transformation to big box stores.
TIRANA, July 20 – Albania’s retail sector, long dominated by small stores, is at the cusp of seeing a transformation to big box stores similar to what is seen in Western Europe and North America, international and domestic experts say.
Shopping centers and big box stores are already dotting some of the country’s largest cities, but recent reports provide solid data to show the trends is likely to continue.
A recent report by the country’s main statistical body, INSTAT, shows the volume of retail sales and employment in the sector have both fallen recently, except for new, large chain stores.
The market is changing as small retailers are having to shut down, because of the significant decline in consumption, while new large stores continue to open, benefiting form returning Albanian immigrants who are used to them from their time in Western Europe and North America.
On the investment end, Albania has very good development prospects for retail trade that involves large, Western-style stores, according to the latest Global Retail Trade Development Index Report published by A.T. Kearney, a company of management consultants.
“The market is still hungry for development,” the report says. “Albania is a small country but it has great opportunities.”
This report referred to Albania for the first time this year, listing the country because of the investment opportunities in retail.
In an analysis of the countries in Southeast Europe, Albania is mentioned as a country with an emerging market that is opening for business.
“The global recession has changed the landscape and left behind small markets that are relatively isolated and in a better position. The new countries in the rankings this year are small markets like Albania, Macedonia, Bosnia and Herzegovina and the Dominican Republic,” says in the report.
According to the publication, Albania is a small market, but it has a positive outlook.
“Albania ranks 12th at the Global Retail Trade Development, with a best ranking in terms of being a market that still has much room to grow and is not yet saturated,” write the report’s authors.
The changing global competitive environment highlights the need for companies to compare different markets for entry prospects, according to the report’s authors.
Published since 2002, the GRDI helps retailers prioritize their global development strategies by ranking the retail expansion attractiveness of emerging countries based on a set of 25 variables including economic and political risk, retail market attractiveness, retail saturation levels, and the difference between gross domestic product growth and retail growth.
The index considers, among other things, the country’s market for investment, political and economic risks and potential threats to the market over time.
“Albania remains a poor country with a GDP per capita of $3,370. By 2014, GDP is expected to grow by 30 percent, which turns it into a place that should be taken into attention in the long run. The food market has many fragments and operates in independent stores as well as small and open markets with domestic products,” the report says, citing the fact that at most there are 30 large stores in the country. This is an indication of how much room Albania’s market offers, not just in terms of food.
Back to the INSTAT analysis, it has determined that there were some retail branches that marked an increase compared to a year ago. This shows new trends of consumption on how businesses did during a year of difficult economic crisis – including relying on big box stores.
