Business Ideas in Romania

Prospects for the “category killer”

• Posted by Steve on October 15th, 2006 filed in Retail

Opportunity: Specialty Retailing

Romania has certainly already seen the successful arrival of the hypermarkets, such as Carrefour and Cora, “Cash & Carry” stores including Metro and Selgros and the do-it-yourselfs such as Brico Store and Practiker (Americans…think of Home Depot). Rising incomes, the fast beginnings of consumer credit and a burst of home renovation activities keeps these stores full every day and evening –and impossibly full on a weekend afternoon.

What has not yet arrived is the next generation of specialty “category killer” retailers such as Office Depot or Staples (office supplies), Whole Foods Market (gourmet and organic foods), Michaels (art supplies), Toys R Us (toys), Bed, Bath & Beyond (linens, etc.), and Barnes & Noble (books), PETsMART (everything for a pet), AutoZone (auto parts).

Early entrants into this market will find there is a wide open space to profitably service willing consumers who prefer more selection for their specialty tastes than the hypermarkets now provide yet want a better price and an ability to find niche items - in one place - than the very fractured market of small retailers now offer. The level of service of retail in general is so poor that even a basic level of service – but consistently delivered - will be well-received.

While this will unfortunately squeeze the small retailer… it can also offer an opportunity for small businesspersons to band together with other retailers, look for franchise opportunities, and follow the model of these successful businesses. Perhaps also they could assist their clients procuring products from online merchants? They will certainly have to expand their offering beyond the current high prices, poor selection, and “hit or miss” service.

Lastly… the substantial size of Bucharest makes it an ideal location for a “flagship” store before embarking on a regional expansion.