RSS
Consumption affected by VAT increase and austerity measures
Two of the main food and do-it-yourself retailers announced dropping sales in the third quarter because of austerity measures and the increase of VAT, which have reduced the people’s incomes and implicitly the product demand. In the third quarter, Praktiker sales in Romania went down by 25%, compared to the same period of 2009, to 57.2 million euro, a company report shows.The German do-it-yourself retailer owns 26 stores in the Romanian market.
“Although sales went well in other countries and other markets enjoyed the foreseen increase, the fiscal measures meant to stabilize public finances in the most important states for Praktiker – Greece and Romania – led to a significant drop of discretionary incomes and expenses of private consumers. This situation determined a drop in demand for do-it-yourself products which had a significant negative impact on Praktiker sales,” the company financial report shows.
The company notes that in the third quarter, it became obvious that macroeconomic risks identified in the first part of the year by Praktiker in Greece and Romania have become reality, the effect being in some places even more serious than expected by the groups in its annual prognosis.Carrefour sales in Romania dropped by 2.8% in the third quarter, to 270 million euro, the decline being limited by the positive contribution of expanding the store network, while after 9 months the French group recorded a slight decline of 0.7% to 804 million euro.
In comparable terms, Carrefour registered in Romania a 6.1% drop in the third quarter and of 5.3% after 9 months, according to the financial report of the group.Calculated at a constant exchange rate, the sales drop was 2.1% in July- September and 1.7% for the first 9 months. The retail trade business volume dropped in July by 10.5% against the previous month as a result of the sales drop for food and non food products, liquors and tobacco, according to the National Statistics Institute.