Quarterly growth of retail sales in Romania slows to a 1.8% year-on-year increase in Q2
Romania's retail sector is experiencing a moderate growth in sales, according to recent data. In June, actual retail sales exceeded Erste Research's forecast, with a 1.1% month-over-month (m/m) increase and a 2.5% year-over-year (y/y) rise. However, the annual pace of growth in June was the slowest in one and a half years, indicating a potential slowdown in the sector.
The retail sales volume index also saw an increase of 1.8% y/y in Q2. Yet, the quarter-over-quarter (q/q) growth was only 0.2%. Non-food sales contracted by 0.6% q/q in Q2, while the annual increase eased to +4.2% y/y from +7.8% y/y in Q1 and +14.8% y/y in 2024. On the other hand, car fuel sales posted moderate growth rates of +0.4% q/q and +0.6% y/y in Q2, with volatile dynamics over the past years.
Food sales, however, saw a reversal in Q2, with a 1.7% q/q rise, contrasting the -2.3% q/q decline in Q1.
The growth in retail sales is supported by Romania's solid economic growth and increasing consumer purchasing power. However, several factors are expected to moderate the growth rate in the coming quarters.
Urban market saturation, as significant new retail space (150,000 sqm in Q2 2025) is delivered, can intensify competition and slow expansion in cities. Regulatory oversight by the Romanian Competition Council (RCC) also plays a role, as antitrust rules prevent market dominance and influence major retail players to divest stores to maintain competition.
The pace of digital and e-commerce adoption within the retail sector is another factor shaping the growth trajectory. The shift to e-commerce is accelerating, with firms like Ahold Delhaize reporting 14.4% growth in online sales and profitability improvements in omnichannel models.
The entrance of over 40 international retail chains between 2020-2025 increases competitive pressure but also indicates strong market fundamentals. However, this could moderate rapid growth by increasing competition and limiting space for price and volume expansion.
Despite these challenges, Romania's retail sector continues to show resilience. The fiscal and budgetary reform packages are expected to contribute to the sector's growth, albeit at a moderated pace.
However, other economic factors could impact the retail sector. Real wage growth for the entire economy could be close to zero in 2025, due to persistent high inflation and frozen wages, particularly in the public sector. This could affect consumer spending and, consequently, retail sales.
Consumer confidence also plays a crucial role in retail sales. In July, consumer confidence posted the sharpest deterioration, with the balance plunging to -31.4, its lowest since June 2022 during the outbreak of the war in Ukraine. This suggests that consumer spending could be affected, potentially impacting retail sales.
In summary, while Romania’s retail sales are supported by a growing economy and digital transformation, growth moderation is expected due to urban market saturation, regulatory constraints aimed at preserving competition, and a transforming retail landscape embracing e-commerce. These factors, along with economic and consumer confidence dynamics, will shape the trajectory of the retail sector in the coming quarters.
References:
[1] Economic and Consumer Factors: Romania’s solid economic growth and increasing consumer purchasing power underpin demand, but structural factors like demographic shifts (aging population) and evolving health awareness also influence retail trends especially in sectors like consumer health and pharma.
[2] Market Saturation and Regulatory Constraints: Romania is experiencing saturation in urban retail spaces, with significant new retail space delivered (150,000 sqm in Q2 2025), which can moderate growth especially in cities as competition intensifies and available urban retail expansion slows. The RCC imposes antitrust rules to prevent market dominance, influencing major retail players like Ahold Delhaize to divest stores to maintain competition. This regulatory vigilance shapes consolidation and competition, affecting how fast retail sales can grow via acquisitions or expansions.
[3] Digital and E-Commerce Growth: Although retail is growing, the shift to e-commerce is accelerating, with firms like Ahold Delhaize reporting 14.4% growth in online sales and profitability improvements in omnichannel models. Continued adaptation to digital trends will significantly impact retail sales trajectories.
[4] Retail Market Entry and Competition: The entrance of over 40 international retail chains between 2020-2025 increases competitive pressure but also indicates strong market fundamentals. However, this could moderate rapid growth by increasing competition and limiting space for price and volume expansion.
- In the face of urban market saturation, regulatory oversight by the Romanian Competition Council (RCC), and increasing competition from international retail chains,Romania's finance sector, particularly the business of retail, continues to experience moderated growth despite the positive impact of digital transformation and Romania's solid economic growth.
- The retail sector's growth in Romania is not only influenced by economic factors and digital transformation but also by consumer factors such as real wage growth and consumer confidence. The potential of near-zero real wage growth in 2025 and a sharp decline in consumer confidence in July 2022 could significantly affect consumer spending and, subsequently, retail sales.
