Russian retail sales contracted 8.7 per cent in March from a year earlier, the Federal Statistics Service said in a report published last week.
That was the biggest drop since 2009, according to data compiled by Bloomberg. Conversely, retail sales in Romania advanced 3.5 per cent in February from a year ago, after growing 6.4 per cent in 2014. That compares with a 7.2 per cent decline in 2010.
"In Russia, some retailers are trying to exit because of the tough market conditions, so they are trying to expand in Romania as a growth alternative,” Walter Wolfler, the head of CB Richard Ellis’s central and eastern European retail unit. “Many more retailers want to enter Romania.”
Declining purchasing power and currency volatility in Russia is also prompting Russian business men look for opportunities in Romania.
A Russian supermarket, Berezka, opened three stores in Bucharest and plans to continue an expansion to five by the end of the year, according to a Ziarul Financiar report on Tuesday.
Though spending power in the European Union’s second- poorest country remains stunted by the $418-a-month average wage, that figure has grown 25 percent since 2009. Romania’s gross domestic product per capita is expected to catch up to about 70 percent of the European Union average by 2020 from the current 54 percent, according to the Romanian Finance Ministry.
At least four new malls are set to open this year and three more will be expanded across the country. The Mega Mall in Bucharest is scheduled to swing open its doors for customers as soon as next month, according to real-estate consultancy DTZ Echinox.
“Private consumption is taking the leading role from net exports” in boosting growth, said Ciprian Dascalu, ING Bank Romania’s chief economist. “Private services taking the largest share of the pie makes the current growth less cyclical and more domestically driven.”
In addition, Romanians are also among the least thrifty citizens in Europe, allocating more than three-quarters of their income on consumption, Eurostat data show.
Bloomberg News, edited by ESM
