INSTAT data show retail sales fell by 5.5 percent y-o-y in the third quarter of 2011, the peak of the tourist season, although slightly recovering from the previous second quarter
TIRANA, Feb. 13 – On a falling trend since early 2010, retail sales registered their sixth consecutive drop in the third quarter of 2011, confirming the severe situation the Albanian economy is facing as domestic consumption fails to recover and investments remain at low levels. Latest data published the country’s state Institute of Statistics, INSTAT, show retail sales fell by 5.5 percent y-o-y in the third quarter of 2011, the peak of the tourist season, although slightly recovering from the previous second quarter.
What’s worse employment in this important sector shaped by mostly small independent shops and open markets of self-grown products dropped by 5.6 percent year on year and was down 3.6 percent compared to the second quarter of 2011 despite a 9.1 percent increase in the volume of retail trade reported for the third quarter of 2011.
The INSTAT data confirm the pessimistic expectations by both businesses and consumers as unemployment rate stands at high rates, the cost of living is on the rise, and migrants face tough times in their crisis-hit host countries sending less remittances.
The latest Bank of Albania survey shows confidence in the key services and construction sectors dropped to a record low in the final quarter of 2011 and expectations for the first quarter of 2011 remain pessimistic.
Detailed INSTAT data show retail sales slightly improved in August 2011 when they were down only 2.2 percent compared to August 2010 but shrank by 7.1 percent in Sept. 2011 at the end of the tourist season.
Retail sales of mixed articles mainly food, beverages and tobacco registered only a 1.3 percent increase in non-specialized stores but dropped by an average of 12.7 percent in specialized stores compared to the third quarter of 2010. The INSTAT report shows increased spending on motor vehicles and fuel, medicines and household equipment, but a cut on clothing and shoes, books and newspapers.
The trade, maintenance and repair of motor vehicles rose by 60 percent increase y-o-y in the third quarter of 2011, registering the biggest increase in the third quarter retail trade report. Within this group, retail sales of fuel rose by an average of 70 percent year-on-year, hinting that despite crisis impacts Albanians have not cut down on luxury products.
The retail sales results indicate an ongoing poor GDP growth even in the third quarter of 2011 as remittances, FDI and travel revenues have already proved negative.
Albania’s central bank reports a 25 percent drop in foreign direct investments, a 42 percent shrink in remittances and a slight 8 percent fall in tourism revenues for the first three quarters of 2011 y-o-y
Albania 13th on retail development index
In the latest 2011 Global Retail Development Index published by US-based management consulting firm A.T. Kearney, Albania lost one spot to 13th position this year. “Albania is relatively tiny (population 3.2 million), but its high ranking is driven by a lack of market saturation. It is a good country to have on the radar in the medium term, but it may not be the most pressing country to enter today. Carrefour’s plans to enter Southeastern Europe in partnership with Greece’s Marinopoulos will include stores in Albania,” says the report.
On a 100-point scale, Albania’s market attractiveness was rated at 19.9 percent, country risk at 48.3 percent, market saturation 79.6 percent, and time pressure at 60.5 percent with a total score of 52.1 points.
The 30-developping country list was topped by Latin America’s Brazil and Uruguay. Bulgaria, which along with Albania and Russian was included as an Easter Europe country, ranked bottom of the list.
Back in 2010, Albania debuted in the Global Retail Development Index (GRDI) in the 12th place driven mainly by its unsaturated market.
The Global Retail Development Index (GRDI), which in 2011 marked its 10th edition, is an annual study that ranks the top 30 developing countries for retail expansion worldwide. The Index analyzes 25 macroeconomic and retail-specific variables, both to help retailers devise successful global strategies and to identify emerging market investment opportunities.
