Retail sales drop by 2.5% y-o-y in Q2

TIRANA, September 9 – Albania’s retail sector, dominated by small stores, shrank in the second quarter of 2010, reflecting the poor consumer confidence. A report published by the Institute of Statistics, INSTAT, showed the retail sale index dropped by 2.5 percent year-on-year but increased by 3.1 percent compared to the first three months of this year.
The sales volume of ‘mixed articles’ (mainly non-food ones) increased by 7.5 percent compared to the first quarter of this year.
Meanwhile, the sales volume index in the “trade and repair of motor vehicles” increased by 12.4 percent year-on-year but dropped by 13.5 percent compared to the first quarter.
Retail automotive fuel sales dropped by 0.6 percent compared to the first quarter but rose 25.2 percent year-on-year.
Employment in the retail sector dropped by 4.8 percent compared to the second quarter of 2009. Meanwhile, the employment index in the “trade and repair of motor vehicles” registered a 1.2 percent increase compared to the same period last year.
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.
According to the latest central bank survey, consumers’ expectations of the general economic situation and their current financial situation improved by 12.1 and 8.7 percentage points respectively compared to the previous quarter but remained below their historical average. Consumers also perceived an increased cost of living during the second quarter.
Employment expectations for the remaining second half of the year remain negative despite a slight improvement compared to the previous quarter, when the economy grew by 2 percent and unemployment climbed to 13.83 percent.
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 make 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.