Tirana Times
TIRANA, March 14 – Retail sales continued dropping for the third consecutive quarter in 2010, falling by 1.1 percent in the final quarter, a sign showing a drop in purchasing power and an ongoing saving trend despite the country’s economy returning to high growth rates in the second half of 2010.
INSTAT data show the retail sale index in the final quarter of 2010 dropped by 1.1 percent year-on-year but was up by 1.3 percent compared to the third quarter thanks to the year-end holidays.
The employment index in the retail sales continued deteriorating, dropping by 1.8 percent year-on-year. Meanwhile, employment index in the “trade, maintenance of cars and motorcycles” rose by 12.1 percent y-o-y.
Compared to the third quarter of 2010, the sale of mixed articles, mainly food, beverages and tobacco in non-specialized stores rose 5.6 percent while the trade and repair of cars was up 11.1 percent.
The retail fuel sales also continued increasing despite soaring prices which have reached up to 170 lek/litre for petrol. INSTAT data show fuel sales rose 9.4 percent y-o-y and 19.2 percent compared to the third quarter.
Data show household equipment registered negative y-o-y growth rates from 14 to 23 percent during October-December 2010. Meanwhile, the sale of books, newspapers and stationery us up 47.7 percent in October but dropped by 15.2 percent in December 2010 y-o-y.
Clothes and footwear retail sales were also slightly up by 2.8 percent in December 2010.
INSTAT data show the volume of retail sales in July-September 2010 dropped by 0.6 percent year-on-year but increased 2.7 percent compared to the second quarter.
Albania’s retail sector, dominated by small stores, shrank 2.5 percent year-on-year in the second quarter of 2010, reflecting the poor consumer confidence. Employment in the retail sector dropped by 4.8 percent compared to the second quarter of 2009.
During the first quarter of 2010, the retail sale index increased by 5.7 percent year-on-year but dropped by 7.8 percent compared to the last quarter of 2009.
A recent study by US-based management consulting firm A.T. Kearney has described Albania as a small market with a positive outlook. “Albania debuts in the Global Retail Development Index (GRDI) in the 12th place driven mainly by its unsaturated market. Albania is still relatively poor with a per capita GDP of about 3,370 dollars; by 2014 real GDP is expected to grow by 30 percent which makes it a country to watch in the longer term,” said the report.
So far, the fragmented food retail market is shaped by mostly small independent shops and open markets of self-grown products. The top three grocery retailers together operate fewer than 30 stores, added the report.
Albania’s market attractiveness was rated at 30.4 percent, country risk at 30.2 percent, market saturation 82.2 percent, and time pressure at 61.7 percent with a total GRDI of 51.1 points out of a maximum of 100.
The 30-country list was headed by China with Guatemala at the bottom, according to the 9th annual Global Retail Development Index study from management consulting firm A.T. Kearney.
“Private consumption continues being conditioned by consumers’ hesitating behaviour in spending money and little support with loans,” said central bank governor Ardian Fullani earlier this year, adding that low consumer demand had also stopped businesses in making new investments.
Differently from 2010 when the economic growth was mainly based on exports which registered a 60 percent increase compared to 2009, the Bank of Albania (BoA) expects the 2011 growth to be based more on domestic demand following declining exports in the fourth quarter of last year.
Consumers become more pessimistic
Consumer confidence continued dropping for the second quarter in a row at the end of 2010 as the big purchases and the expected economic and financial situation indicators registered negative rates, according to a central bank business and consumer confidence survey. Meanwhile, business confidence registered a turning point in the fourth quarter of 2010 as the industry and crisis-hit construction sectors became more optimistic about their futures.
Survey findings show the Economic Sentiment Indicator (ESI), measuring consumer and business expectations, grew by 1.6 percentage points in the final quarter of 2010 but still remained 7.2 percentage points below its long term historical average. The improvement was a result of 5.5 percentage point growth in the industry confidence index and a 7.3 percent increase in the construction sector which somehow compensated the drop in services and consumer confidence by 2.2 and 1.6 percentage points respectively.
Consumers’ expectations of the employment rate for the first half of 2011 became more pessimistic with 36.8 percent of them expecting an increase and only 16.4 percent expecting the jobless rate to drop.
