Abstract
The Q409 BMI Bulgaria Retail report predicts that the country’s total
retail sales are expected to grow
from an estimated US$17.44bn in 2008 to
US$21.07bn by 2013. Key factors behind retail market
expansion include
rising disposable income and Bulgarians seeking the choice and low prices
offered by
foreign and domestic chains. EU membership gained at the start
of 2007 and a substantial amount of
foreign direct investment (FDI) have
allowed retailers to make significant inroads into the market,
contributing to forecast annual retail sales growth of 6.0% between 2008 and
2013.
Bulgaria’s nominal GDP in 2008 was US$48.57bn, with a decline
of 5.3% now assumed for 2009 as the
economy goes into reverse. Average
annual GDP growth of 1.3% is now predicted by BMI between 2008
and 2013.
Although the population is forecast to decrease slightly, from 7.6mn in 2008
to an estimated
7.5mn by 2013, consumer spending per capita is expected to
increase from US$4,472 in 2008 to
US$6,725 by 2013.
The growth in the
overall retail market will be driven in large part by a growing urban
population with
higher disposable incomes and an interest in aspirational
purchasing. According to the UN Population
Division, the urban population
in Bulgaria is expected to grow from 70.5% of the total in 2005 to 72.2%
by 2010, and to more than 78.0% by 2030. Meanwhile, consumer spending per
capita of the middle 60%
of the Bulgarian population is forecast by the
World Bank to rise from US$1,225 in 2000 to US$5,941 in
2012.
Retail
sectors that are likely to see substantial growth over the forecast period
include consumer
electronics, with BMI estimating that sales will rise by
50%, from an estimated US$1.05bn in 2008 to
US$1.58bn by 2013, and
over-the-counter (OTC) pharmaceuticals, with sales predicted to increase
by
30%, from an estimated US$0.15bn in 2008 to US$0.20bn by 2013.
Assuming an unchanged market share, BMI also estimates that furnishing sales
will rise 21% over the
forecast period. In 2008, the Austrian home
improvement retailer BauMax opened the country’s biggest
DIY
hypermarket in Plovdiv. According to press reports, the company plans to open
15 more outlets at a
cost of more than EUR150mn (US$194mn) over the next
five years.
Automotive sales, on the other hand, are predicted to decrease
from an estimated US$2.17bn in 2008 to
US$2.14bn by the end of the
forecast period with the falloff in economic growth and credit
availability.
Retail sales for the BMI universe of Central and Eastern
European (CEE) countries in 2008 amounted to
an estimated US$1,199bn,
based on the varying national definitions. Total consumer spending for the
region based on BMI’s macroeconomic database amounts to US$1,812bn.
Russia, Turkey and Poland
together accounted for an estimated 82% of
regional retail sales in 2008, with their combined share
expected to reach
almost 84% by 2013. For Bulgaria, the estimated 2008 market share of 1.5%
is
expected to be the same in 2013.
| 
View Cart
