Contact:
Giedrius Čiupaila, Head of Marketing and Communications, PricewaterhouseCoopers, tel. +370 5 239 2300
9 October 2003
Opportunities for expansion not only in the local market but also in other Central and Eastern European (CEE) countries are open to Lithuanian retail companies, according to the
Retail & Consumer. Winning Strategies in Russia and Central & Eastern Europe study by PricewaterhouseCoopers.
The report shows that foreign companies have dominated the development of the retail sector in most CEE countries, except for Bulgaria, Lithuania and Turkey.
Chris Butler, PricewaterhouseCoopers Senior Partner for Lithuania, said:
"Until recently, international retail chains were not particularly interested in the Lithuanian market either because of its size or because it has been dominated by local companies. Lithuanian retailers are not only local market leaders but are also rapidly expanding their operations and investing in the neighbouring countries."
The objective of the retail study is to make potential investors aware of business development opportunities in the region and the retail sector specificities, trends and perspectives. The study shows that market saturation differs significantly across CEE counties, e.g. the Czech and Polish markets are saturated, whereas it is still growing in Bulgaria, Lithuania, Romania and Russia. The report also identifies main factors and trends of the retail sector development in the region, i.e.:
- Increased consumer buying power and improving standard of living
- Development into regional towns and smaller cities
- Changes in consumer needs and shopping patterns, which encourage development of shopping/recreational centres
- Increase in private label products (guaranteeing quality at lower prices)
- Development of the hard discount format
- Expansion of non-food retail outlets
- Accession to the European Union, which is expected to give CEE countries an extra economic boost.
The report also discusses investment strategies to be pursued by foreign companies seeking to enter the Russian and CEE markets. Investors should take into account three key success factors:
- Thorough research of the local markets: good awareness of price sensitivities and consumer preferences and needs in the markets. Operating formats, product ranges and pricing strategies may be very different from their operations in more mature markets.
- Training of local staff and management: transfer of know-how and expertise in modern retail management.
- Supply Chain Management: close cooperation with local suppliers to ensure reliability and cost-effectiveness of supply.
The PricewaterhouseCoopers study
Retail & Consumer. Winning Strategies in Russia and Central & Eastern Europe focuses on nine countries of the region: Bulgaria, the Czech Republic, Hungary, Lithuania, Poland, Romania, Russia, Slovak Republic and Turkey. The study was conducted in these countries between March and July 2003. The output consists of a series of country reports including overviews of the economic and regulatory environment, demographics and consumer behaviour, and retail and consumer goods sector performance, issues, opportunities and outlook. The study aims at providing a relatively objective picture of the sector structure and market potential in each country, from a local perspective.
Notes to editor
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