How good are those best deals?

The supermarket triumph in Romania. Or how big stores took less than 15 years to take hold of Romania’s pockets

It’s Thursday, at 7 15 am and the air is chilly after last night’s downpour. Cars and minibuses fill the parking lot. “I’ve been here since five thirty and these guys want to get in before me?” a grey headed man swishes his empty plastic bag; he heads a queue of about 120 people. They’re all fidgeting as they see through the double glazed doors another 30 people wrestling towards the other entrance. Security agents are checking their watches and reassuring the crowd that both doors will open at the same time.

My press pass helps me squeeze into the store and find refuge in a corner. At once, a gush of trolleys floods the spotless floor; store managers lift up their smartphones to capture the flow of shoppers. Speakers thump with a familiar Romanian song, dozens of lions flaunt their golden manes from the LCD-covered wall, a young man serves champagne and orangey juices in plastic cups. A couple of employees push their wide-bladed knives in the marzipan-frosting and give away bricks of the inaugural volcano-shaped cake.

Photo: Adrian Catu

It’s been almost 18 years since the first international chain of superstores came to Romania. Today, fireworks brighten the second supermarket in Rahova neighborhood, the newest of the 226 supermarkets in Bucharest and one of over 1000 countrywide, all owned by 13 international retailers. Life in Romanian cities can hardly be imagined now without supermarkets. But while their arrival changed us, too rarely have we stopped to see how. I went down the supermarket aisle and beyond to explore this change.


On the corner of 171 Street and Jamaica Avenue. Queens, NY City, USA. It’s 1930. Here comes the Big Bang of shopping.

King Kullen is the world’s first supermarket and emerges from the nothingness of the Great Depression. One out of every five Americans is unemployed; food is too expensive; industrialization left its oversupply of products rotting in warehouses; shops have become too pricey to keep. 46 year old Michael Cullen quits his grocery store job and makes his dream come true: a BIG store, a store SO BIG that it would be both warehouse and window shop, offering A LOT of products that people could freely grab.

King Kullen is a refurbished garage, the size of two tennis courts, with cement floors and cardboard boxes instead of shelves, where the only thing that matters is the LOW, VERY LOW price. And the price is low because the store buys in bulk, doesn’t need extra storage and short-circuits distribution using middlemen. The supermarket becomes a national phenomenon which sells a hundred times more than traditional groceries and fuels American pleasure for weekly shopping sessions. Slowly, but surely, consumerism breaks all boundaries.

Supermarket expansion has conquered every continent, one wave after another – says Thomas Reardon, professor of agriculture at Michigan State University, who has studied superstores in the last 20 years. Supermarkets multiply using a simple supply and demand system, he says. When an economy gains momentum – its GDP increases, incomes follow, and the country becomes more urban – retailers read the signals early. And conquering a nation involves a precise choreography, according to Reardon. After they set camp outside cities, supermarkets reduce their costs by creating their own logistics, including distribution centres and warehouses. But to get closer to customers, they need to meet them halfway; and if they’re too big to fit in the neighborhood, they know how to shrink – step by step, hyper becomes super, super becomes express, catching more customers on their orbit. Whenever the market is saturated, retailers repeat their dance in smaller cities and towns.

Photo: Bogdan Croitoru

Romania was a modern Cinderella who took more time to get ready for the big retailers’ league. Many former communist states embraced consumerism not long after the Iron Curtain fell; but Romanian bureaucracy and muddled ownership rights stalled market liberalization.  In 1993, according to a report from the Food and Agriculture Organization (FAO), the Romanian government’s hesitation to profoundly reform the state was hitting farming, which lost about a quarter of its production in the first years of capitalism and could not keep up with increasing internal food demands.

The gap between communist trade – concentrated in the hands of the state, rationalized on a monthly basis – and booming private businesses opened people’s appetite for choice. On a market with a three-figure inflation rate and expensive credits, trade became privatized using internal capital, largely invested in small businesses – says Dan Dabija, professor of marketing at Babes-Bolyai University in Cluj Napoca. Consumers weren’t fighting over scarce produce anymore; small shops were competing for consumers now – in 1994, when the first foreign-capital supermarket opened in Romania, about three quarters of the food consumed in the country was sold in shops under 50 sqm. In 1997, “the Germans broke the ice into unexplored territory, introducing Romanians to the cash and carry concept” – says Nicolae Pop, dean of Business Administration at Bucharest’s Academy of Economic Studies.

In 2001, when the first hypermarket opened, less than one in ten Romanians were shopping in supermarkets. But foreign investors eyed an emergent market, a future member of the European Union, where macroeconomic and political risks had watered down and traditional trade had already lost a lot of battleground during communism.

Then the boom came. Between 2004 and 2008, retail increased its market share by an average of 8.5% every year – the highest growth rate in Central and Eastern Europe. Almost a third of Romanians were shopping in big stores.

Although the financial crisis hit in the very midst of their growth, supermarkets in Romania kept their ground, “as they had the capacity to adapt to a turbulent economy and their mother companies backed them financially”, explains Dan Dabija . But only the ones that had expanded enough were able to face the drop in sales. Dabjia sees the crisis as an opportunity that retailers took: price sales were lifesavers for many Romanians; you cut short your grocery list, you didn’t shop that often, but when you did, you still went to the supermarket.

But what did this supermarket boom mean for Romania’s economy? Several researchers have shown that prices are the main tool when more and more companies enter the market, and standing out of the crowd becomes increasingly difficult. This race to the bottom tends to limit inflation. “Modern retail creates a competitive pressure and keeps prices low”, says Bogdan Chiritoiu, president of Romania’s Competition Council. Although now there are fewer players on the market, Chiritoiu is optimistic. There are “still more supermarket chains in Romania compared to other EU states. We aim to maintain this competitive pressure.” There is also a type of natural selection happening – if the strongest retailers end up dominating the market, the whole industry increases its productivity and manages better sharp price rises.

Photo: Bogdan Croitoru

Supermarkets have not gained a dangerous competitive advantage in Romania, at least in theory. But in practice, in 2011, three companies were controlling 19% of all sales in super and hypermarkets. In 2012, modern retailers had shops in 245 cities and towns. In 2013, 12 retailers owned only 1% of the total number of shops, but one third of total sales surface nationwide.


It is us, the customers, who have the final say in what happens with supermarkets, as we open our wallets at the checkout. But at the same time we tend to remain oblivious of those who play a part in our shopping sessions. Who are they? And what does this Romania of supermarkets mean to them?

For answers, I go first to Mihai Visan, the executive director of Romalimenta, to find out what have supermarkets meant for the food industry he represents. “During the ‘90s, we were working exclusively with neighborhood shops; merchandise distribution and payments were messy. The arrival of a supermarket which sold large volumes of goods and paid its debts was really welcomed; every supplier was looking to a get a place at the table”.

But the industry grew and the balance of power swayed in favor of big box stores, which suddenly had huge negotiation power over the thousands of suppliers.  “Many suppliers were being abused – they were required to pay shelf taxes, store opening, marketing, anniversary fees.” In 2008, the Agribusiness Accountability Initiative reported power abuses by large supermarkets in 17 European countries, including Romania. Producers were often the ones that ended up paying the price drops in the store, especially if the supermarket would buy their goods and sold them at a very low price, even below production costs. Also, when smaller shops using the same suppliers saw supermarkets getting better price deals, they asked for similar rates.

Organizations from the food industry asked the Ministry of Agriculture to start talks with retailers and set a “Best Practices Code” that would regulate the supermarket-supplier relationship. Although it signed it off, the Competition Council remained skeptical about its supposed positive effects. And not everybody got onboard. “A reverse effect of unfair competition occurred as a big part of retail did not agree to any regulation and continued its liberal practices; those who did agree were left with many obstacles” – admits Mihai Visan. Legislation adopted in 2009 and amended the following year addressed some suppliers’ problems, requiring retailers to pay their debts in maximum 35 days. “Romania is one of the few EU countries regulating this issue”, says Visan. However, he adds, eliminating suppliers’ abusive taxation failed to produce any results, as supermarkets invented new taxes or increased their remaining fees.

Nobody is exempt from these price wars. Small producers who cannot keep up with demands run out of business, while stronger companies are forced to reduce their investments in innovation or layoff staff.

Then there’s the private label. In the last 10 years, supermarkets have increasingly used it to attract price-sensitive Romanians. In 2013, store brands were already taking up 15% of total retail sales, a Roland Berger report shows. For the store that holds all the reigns, its own brand does not incur major development costs, as it closely follows already famous brands. The supermarket thus becomes not only a host for private producers, but also their direct competitor.

Threatened by “house products” displayed for customer convenience without additional costs such as shelf taxes, suppliers could actually pay more so that their products don’t end up on the so-called “hernia” shelves. At the same time, many private labels only give information on distribution and addresses, without singling out the producer. If the primary source remains anonymous, big stores can easily end the contract with a producer if they’re not happy and get another one that will do the same job, without any visible changes to the products. And it’s usually the case that in supermarket contracts the producer is the only responsible for the quality of the product.


A tiny woman oozing with energy, 35 years old Adina Minciuna smiles at her customers at her stall in Obor market. For the past 14 years, she’s been commuting every morning from Barbuletu, Dambovita county, to Bucharest, to sell her apples and potatoes. She barely makes ends meet – on weekdays, there aren’t many buyers, and renting a stall costs about 90 lei per day. Too much to make a profit, especially after a hypermarket opened about 700 m away from the farmers’ market. Adina says that people got used to the big stores; they’re pickier and look not only for tasty products, but also for pretty ones. “Supermarkets will always win. You know how it goes – take from here, throw it there, it doesn’t matter if you crushed it, and till you get to checkout you’ve got time to decide if you want to pay or eat it on the spot.”

Very few farmers get to sell their produce in big supermarkets. “Between 15 and 20% of supermarket products are sourced from Romanian producers” – says Cornelia Alboiu, agricultural economist at the Romanian Academy who studies national fruit and veggie production. “In Poland or the Czech Republic, 60 to 70% of produce is sourced internally, because farmers’ are organized in groups, having plenty of negotiation power”.

At the end of 2013, a report from the Ministry of Agriculture showed that only 1% of Romanian farmers were part of any type of producers’ organization, compared to the 34% EU average. Quantity, quality, frequency, those are the foundations on which big stores operate, and they “are businesses, they will work only with those who can adapt to their standards”, says Alboiu. To do that, the small Romanian farmer would have to invest heavily to offer higher yields at a constant quality. But supermarket practices can be discouraging – shelf taxes can be as high as 10-15% of the price farmers receive, they might wait for a long time to get paid, and some contracts could even require exclusivity, leaving them with no escape if the store turns down their produce. This happens quite often – says Alboiu – “if the products don’t sell, they call the farmer to take them back himself”. Last, but not least, competition from imports, especially for seasonal fruits and veggies, forces Romanian farmers to lower their prices, so many of them end up working with specialized middlemen.

A lot of voices raised the issue of making way for Romanian products into supermarkets. But there are thousands of producers and only a few supermarket chains – and managing countless contracts remains unrealistic. Also, European laws do not require retailers to allocate special store space to products from the internal market, something seen as unfair competition. “It’s not the supermarkets who should promote those products, it’s the authorities and producers who should take charge”, says Alboiu.

But starting a couple of years ago, the way to supermarkets’ got a little smoother. On a September afternoon, Madalina Barbu swaps her blue slippers with a pair of white trainers, grabs a kitchen knife and joins her mother on the way to the two solariums at the back of their house in Vidra, a small town in Ilfov county. Tonight they need to send 500 lettuces to Metro Cash&Carry, the international retailer that since 2012 has been running a program called “Our stuff” aimed to support Romanian farmers and sustainable agriculture. There are currently about 100 farmers from different parts of the country delivering 45 different types of vegetables and fruit. The store hired Laurentiu Rinchita, a horticulturist, to guide farmers; he gives advice on crop selection, on the optimal harvesting time, on cost and resource efficiency. The key – he says – is controlled origin, tracing the product from seed to shelf. Farmers in the program need to abide to a wide range of protocols and standards, from the type of packaging to temperature during transport, while adapting to market demand. Mirel Barbu, Madalina’s husband, says that for them it’s convenient; they can sell their products in a civilized way, without using middlemen and they have time to tend to their crops.

But there are Romanians who buy fruits and veggies from alternative sources. “It’s really sad to eat glossy tomatoes from Turkey; on the whole, kids grow up eating veggies from the supermarket” – says Milli, a young girl from Bucharest, who came to a bookshop in the capital to pick up her weekly veggie basket; to get her produce, she pays a monthly subscription to the Association Supporting Peasant Agriculture, which connects small local farmers to people who want high quality, seasonal products, sourced through a traceable supply chain.

Photo: Adrian Catu

Marian Paraschiv has a farm in Adunatii Copaceni, in Giurgiu county, and tonight is handing to subscribers their blue plastic bags  all bursting with spinach and green onions. He grows a lot of things, depending on the season, from cucumbers to okras, Brussels sprouts and corn. He’s grey-haired but he’s fit and says he has no interest in money, he’s simply happy to offer people honest produce, which he harvests alongside his wife and son. “You have to keep your body healthy, but you’ve got to be a bit damaged upstairs to do this”, he chuckles.


At the bus station, people need to yell to hear each other over the piercing sound of screwdrivers. A couple of workers are double glazing the first floor of a neighboring building, insulating from the outside world roughly 200 sqm hosting grey metal shelves still in their plastic covers.

“Here comes another one – tsks a man. There’s another one 300 m away. But now I can actually jump from my bed into the store.” The proximity store is a fairly recent symptom of big supermarket conquest; their brand sprouting at every street corner is an overwhelming menace for small stores, already weakened by the retail boom. If in 1996 there were between 150.000-160.000 groceries, boutiques and neighborhood stores, today only half of them are left.

“I think it’s unfair” – says Marius, former owner of a small neighborhood store in Bucharest, who refused to disclose his real name. After a first good year, when about 600 customers would walk through the door every day, three supermarkets appeared close-by. His sales dropped, then he brought money from home to keep up the business, but he eventually had to close down. “Everybody criticizes you, thinking you’re getting rich, but what they don’t know is that our profit margins are very low; and it’s all orchestrated by the main leaders on the market, supermarkets that bring lower prices; and I know for sure they actually tax heavily their suppliers ”.

Prices have changed the face of cities and the fate of many small enterprises. In 2012, 95% of Romanians’ monthly shopping budget was spent in big supermarkets, according to an ACNielsen study. And although many still use neighborhood stores, they complain about the lack of price offers and diversity.

“The state doesn’t help you”, says Marius. VAT is high, payments are due on an exact date, any delays are harshly fined, and all this pressure pushes many to evade taxes by avoiding invoices, in small stores and wholesale markets alike. In 2012, retail was the second tax-dodging sector in Romania, with 37% of its workforce without a contract, according to data from the Fiscal Council. For authorities, big supermarkets that aren’t tempted to break the law are the good guys.

store
Photo: Adrian Catu

Although they lost market dominance in 2013, small neighborhood stores remain a vital source of jobs. In the UK, where resistance towards big box stores increased, reports showed that about 50% of small shops’ turnover feeds back into the local economy, compared to only 5% that supermarkets redistribute.

Maria Muntean, executive secretary at the National Association for Small and Medium Enterprises, says that in Romania supermarkets run a dangerous location policy that ignores any rules. I ask Bogdan Chiritoiu if this geographical expansion is not a type of competition that should be regulated. “We can only restrict acquisitions and mergers, but not an organic development; we can’t stop them from opening a store. We can only check if they have abusive prices and practices”, he says.

But some grocers have stood their ground. Liliana Comaneci has a shop in the capital and is celebrating its 20th anniversary this year. Wearing an elegant two-piece suit in a 2 by 2 office at the back of the store, she says she realized she needed to do something different to keep up with competition in the area. Her store has no more than 250 sqm, 15 employees and sells about 7,500 different products, from aubergine salad to brands of biscuits you rarely see in supermarkets.  Ever since she’s been fighting competition and the financial crisis, she hasn’t made any profit. People are spending less and buy things they won’t usually buy in big stores – cigarettes, sweets, alcohol.

The community created around a store is also important. “If you don’t give a customer the time of day, he won’t come again”, says Saban Okur, who came from homeland Turkey to Romania in the 1990s, and owns a store 300 m away from a hypermarket. On a bench outside people are chatting over coffees, while at the till, shop assistants entertain customers. Saban greets everyone, knows their preferences, sometimes goes to wholesale markets to pick up special orders and thinks 70% of neighborhood stores’ business is built on networking.


Sunflower oil is jiggling its gold under neon lights, as customers are grabbing the bottles. A lanky young man sits on top of the oil boxes, moving them around as in an obsessive Tetris game. “It’s plain awesome”, he shouts when I ask what he thinks about hypermarket work.

About 150,000 people work in Romania’s super and hypermarkets. An industry of cashiers, store workers, section managers, bakers, pastry chefs, confectioners, butchers, people putting leaflets in our mail, smooths our relationship with the big store. You see them all, but you don’t mind them. Few employees, if any, talk about their life in the store, and those who do ask for anonymity. They’re afraid of the consequences. From the US to Belgium, problems of employees in retail have often been discussed, investigated, analysed. In Romania, many are just website chat material or are treated as isolated issues.

“There are days when you just stay home  and days when you’re always working. There are people working even 9 days in a row, mornings or afternoons” – says M., a former cashier at a hypermarket; she quit her job after being mistreated. Flexible hours turn out to have their quirks, depending on the system retailers use – some take into account what their employees want, others schedule work shifts through a computer programme. “You don’t really have any spare time” – says Costi, a down-to-earth, lively guy, who worked his way up from the shelf to the sales department in another supermarket chain, that he says he’s happy with. “At first it was shocking. The amount of work is huge and you’re always on your feet – he says. Everybody does everything. Often, you have to do 3 things at once.”

Big stores are not picky when employing and are attracting young people in search of work experience. But low paychecks quickly push them away once they find better jobs. Continuous stress is also a cause. “We have a small number of employees in a store, most of them very young, whom we exploit to the limit; choruses are huge and nobody checks them anymore – says Vasile Gogescu, president of the Retail Union Federation, that from 2006, brings together employees from Romania’s multinational companies. All activities are technology-based till you get to the shelf – then you have to move the merchandise neat and quickly from the pallet to the shelf. 50 or 60 people work during one store shift, and there are about 10,000 customers entering the store daily. Spine-related health issues frequent over the age of 40 are now reported by 25-year-olds.”

Hours spent between the shelves or at the till are also a race against time. M. says that cashiers don’t’ get real breaks; if they have too many clients, they’re often not allowed to take bathroom breaks. Another employee at a hypermarket in Constanta says that the store toilet is outside the store and she has to clock in and out every time she has to go; those minutes are then taken out of her lunch break.

Currently, only 3 big retailers in Romania have unions for employees. Overall, only 15-16,000 people have their contracts negotiated and get paid fairly for overtime and free days. In the rest of the industry, people can work up to 50-60 hours overtime and receive nothing – explains Gogescu.


With glasses sliding on her nose, an old lady stretches her neck over the seven pans she’s carrying, looking for a shopping cart. “My sisters in Hunedoara and Vaslui called me to get them frying pans. But they’re junk”, she tells me when I ask why she’s shopping so early. A suited-up man patrols the detergents’ aisle, holding an ironing table under his right armpit and the over-sized slice of cake in his left hand. A couple of children are getting sushi samples from a young girl wearing a kimono and brightly-colored trainers. People come, go, turn around, back and forth.

Is our relationship with supermarkets exclusively relying on a deep realism that gets us what we need by maximizing cost efficiency, while we enjoy the democracy provided by thousands of products? Or is this pleasant, predictable environment more than meets the eye? Spending days and days in stores – and becoming the usual suspect in the eyes of large-shouldered security guards – has helped me understand dozens of marketing and psychology studies pointing out how important is our journey through the store. Especially for retailers.

Nothing is left to chance in a supermarket’s geography. 75% of us tend to look right when we enter a store, but we take a counterclockwise route and we only cover 25% of the store surface on an average shopping trip – according to 1980s study from the American Marketing Institute.

Photo: Adrian Catu

The supermarket is a suitor who shows off everything it has to gain your time and attention. It might use a classic hook-up line, putting the milk, bread or beer at the back of the store, so even when you’re in a rush for the basics, you’ll get to see all its wonders. It knows how to make an impression from the very entrance, when it welcomes you to the so-called decompression area, a sort of foreplay in which the biggest price offers slow you down and brightly colored fruit and veggies ooze health and freshness. It knows that, on average, you blink 32 times per minute, but when you get through its door, all the way to the checkout, that rate drops to 14 blinks/minute, as would happen in a narcosis state. It knows your senses receive about 11 million bytes of information per second and has its ways to get you. Researchers at Western Kentucky University reviewed three decades worth of studies looking at the impact of stores on people. They concluded that we are influenced by 57 different variables, from aisle width to parking lot size.

The supermarket is a psychologist. “Most of our mental processes are emotional and hard to control, including our shopping behavior” – says Ana Iorga, expert in neuromarketing. Her lab in Bucharest is the only one in Romania that uses brain investigative techniques to understand how we unconsciously make decisions with regard to products, a method widely-used by retailers in Western markets. This involves an EEG device, eye-tracking glasses and sensors that spot any change occurring at skin level, the same that would be used in lie detection. Our subliminal reactions are the main stakes for retailers. “At a primary level, what happens when we come in contact with product A is not so different than with product B, although what we think about the products may differ greatly; we use rational arguments to justify our choices, although our brain has already decided what to do before we know it” – says Ana.

The supermarket operates on two opposite fronts – it promises us a familiar environment, that allows us to be quick and efficient, but it also tests our survival instinct to play its ultimate advantage: sales. At a cognitive level, conscious processing uses a very small share of our brain activity, is very slow and eats up a lot of energy; if we would stop and evaluate every single product we place in our cart, we would be exhausted; our brain tends to preserve its resources – Ana explains. If the store always looks the same, we can short-circuit the process and use our memory to shop. To prevent that, retailers often change product location – so you can search more, see more, buy more.

The supermarket is a real estate market. As 80% of products we scan never end up in our carts, manufacturers pay a lot of shelf taxes, so they get a location with a view. If you have an average stature, statistics say that your visual height is somewhere around 1.56 m, that you’ll look at the shelf at a 15 degree angle, so hot spots are at 51-53 m high on the shelf.

Herb Sorensen, a US retail consultant, calculated that an average household buys between 300 and 400 different products every year and only half of those regularly. So, in a hypermarket, only 3% of the products are responsible for one third of total sales; at the same time, half of all the products have just a 5% share in final sales figures. But they are the ones supporting the aquarium where retailers can cast their lines.

Above all, the supermarket is a merchant. And in Romania, the price is king. “The average Romanian consumer remains extremely price-sensitive, giving these companies great emotional leverage” – says Nicolae Pop. We’re always told what’s on offer, even when we’re away from the stores. For a month and a half, I’ve tried to keep track of all supermarket ads ending up in my mailbox.  From a simple A4 leaflet to chunky brochures, from newspaper quality prints to glossy magazines, I counted 420 pages, 3,526 products, all from six super and hypermarkets, a leaflet every two days, all cheering over price Armageddons.

But how good are these low prices? Although on the short term, our budget reaps huge benefits, many economists have reservations when it comes to the real advantages and sustainability of low prices. They say that excessively lowered prices trigger a domino effect: if manufacturers aren’t making a profit or are selling at a loss, their exit from the market diminishes the supply, the acquisition cost increases and so does the store price. Many supermarkets supplement their offer with their own label, but this ultimately reduces our real options.

Price offers also tend to blur the background. When the store uses every prop to show you only where the sales are, the rest of the products seem to be equally convenient. And in a store hosting 40,000 products it’s hard to keep track. I’m in front of the chocolates shelves and I count 221 different types of blissful bars. Next aisle: bread. Brown, with potatoes, enriched with bran, colored in stripes, French baguettes, 91 types in all. Shampoos boosting and taming our hair: 250 different price labels. There’s so much we lose ourselves. We jumped over the till long ago and now we’re splurging in a cornucopia, but we could end up more frustrated and undecided. According to US psychologist Barry Schwartz, when we’re in front of too many options and we want to choose the best one, our purchase might make us more miserable than if we had only a couple of available choices.

Supermarkets could also be making us poorer. “I come with a list, but I also go over my budget” – says Mrs Felicia, who spends about an hour and a half strolling through a hypermarket in Berceni neighborhood. And even if you don’t have money, the big store finds a way for you to spend. Under one roof, one can find credit line booths that make your dreams come true or have credit cards ready in 2 hours, along with points, raffle tickets and small print forms.

“You think supermarkets are made for you, but in many ways, I think we’re made for supermarkets” – says Raj Patel, journalist and food systems researcher, about the structural forces that pave the way for supermarkets: people have low paychecks, they can’t afford to buy from delis or groceries, they don’t have time to cook anymore. Paradoxically, the supermarket panacea can endanger personal finance, especially as Romanians spend the biggest share of their budget on food – more than any EU citizen.

Raj Patel says that we can’t win when only a handful of companies decide what we put on our tables. “The biggest profits don’t come from what’s good for you” – he adds. The resilience of farmers markets and a retail market share still behind Western trends make this theory difficult to prove in Romania. There’s also the argument that supermarkets’ great product variety encourage a varied diet. But economic transition came hand in hand with a change in preferences – we want diversity and quality, but we spend more on low-priced processed and semi-processed products, putting aside nutritional or environmental concerns.

The script is still in the making and no one can actually say how Romanian retail will look like in the future. But the forces that tied us, in sickness and in health, to the big stores, are difficult to turn around. Those of us living in cities are made for supermarkets. Reconnecting with our sources of food, choosing what we buy based on supermarket practices, these are all behaviours that need to be considered realistically in a Romania where price has the last say. Romalimenta’s Mihai Visan thinks that supermarkets will continue to expand to small traders’ doom, but not as aggressively as in the past. When it comes to the unfair negotiation power of big stores, he says that only European laws can regulate suppliers’ contracts on a free market, where national laws do not work.

The cliché of market concentration might occur here as well. It is likely that proximity stores will continue to flood small towns. What might break the expansion is the Romanian village – over 45% of the population is still rural – there pay is low, farmers are subsistent, and infrastructure is in dire need of investments. Online shopping is still far away. Many Romanians do not trust internet transactions and less than 10% who do buy food. If we follow Polish trends, retail could get a hold of 65-70% of the Romanian market.


It’s 9 am and customers are leaning on the handles of their shopping carts, lined up as for airport security; in a new system that cuts waiting times, every few seconds, a robot voice shepherds the next customer to an assigned checkout where cashiers in new uniforms smile, scan, type, help with the bags, then wish people a good day. A girl is cleaning marzipan-smeared plates from shelves and baskets. Managers are chatting over the dismantled volcano: “you’ll see, those already here are calling families and friends, to tell them about the offers. This is nothing. Wait till you see tonight.”

(top photo: Adrian Catu)

Article featured in National Geographic Magazine Romania in December 2014.

Cover photo: Bogdan Croitoru
Cover photo: Bogdan Croitoru

 

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  1. June 24, 2015
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