Saturday, 2 May 2020

22% Rise in Consumption in First Week of Eased Measures

ZAGREB, May 2, 2020 - In the first week since the gradual lifting of the strict lockdown measures, the consumption has risen 22%, the Večernji List daily reported on Saturday.

For the sake of comparison, the consumption in that week was lower by 16% as against the corresponding period in 2019, the newspaper said.

Nevertheless, this rise of consumption by a fifth since the lifting of some of the containment measures is whiff of optimism after the government's projections of the economic downturn by 9.4%in 2020, the daily commented.

Due to the lockdown measures to curb the coronavirus epidemic, the European Union's GDP fell by 2.7% in the first quarter and the euro area contracted by 3.3% whereas there are still no data for Croatia's economy for the said period, the Vecernji List reported.

However, Croatia introduced the containment measures in the second half of March, and the first quarter did not have to turn out negative.

A rebound in the retail trading in the first week since the ease of the measures is a good sign for entrepreneurs and that funds are coming back, the daily said in the comment on the 22% rise according to receipts issued in all activities covered by the fiscalisation system, as reported by Finance Minister Zdravko Marić.

More economic news can be found in the Business section.

Monday, 6 April 2020

Highest Sales Growth Recorded in Second Week of March

ZAGREB, April 6, 2020 - The results of an analysis of consumer behaviour in Croatia during the coronavirus epidemic, conducted by the global data analytics company Nielsen, have shown that the highest sales growth was recorded in the second week of March and that there are six stages of consumer behaviour during this crisis.

The first stage is proactive health-minded buying, which started at the end of February.

The first case of the coronavirus infection in Croatia was confirmed on February 25, and already in the week from February 23 to February 29 there was a significant increase in the sales of certain products compared to the same week last year. For example, tinned fish had a sales increase of 159%, pasta of 114%, flour of 108%, and rice of 97%.

The highest sales growth occurred in the second week of March, from March 9 to March 15, when retail chains saw an average increase of 65% on the year in the shopping basket value.

According to Nielsen, shoppers then entered the second stage of consumer behaviour - pantry preparation.

In that period, the sales of flour rose by 410% on the year and the sales of rice by 301%. When it comes to drugstore products, soap saw a sales increase of 232%, and toilet paper of 162%.

Nielsen says that in the third week of March, from March 16 to March 22, sales growth rates slowed down due to a decline in store visits and operational restrictions in the retail sector.

The decline in store visits did not result in lower consumption, and the shopping basket value had an increase of 46% on the year. That was the third stage - quarantined living preparation.

Nielsen says that we are currently in the fifth stage, restricted living, which will be marked by demand for online shopping services and when everything will depend on high delivery standards.

The final, sixth, stage will be when people return to their daily routines and that will be living a new normal, Nielsen says, adding that consumers will focus more on their health and hygiene practices.

The concern shared by consumers in Croatia and around the world, as well as the effect of new behaviour will decrease over time, but it will not go away completely. Companies that recognise that as soon as possible and adapt to new needs will succeed, Nielsen said.

More coronavirus news can be found in the Lifestyle section.

Friday, 20 March 2020

Coronavirus Shopping Frenzy: 300 Million Kuna More Spent Than Last Year

ZAGREB, March 20, 2020 - Between 24 February and 15 March, during the coronavirus outbreak, Croatians spent HRK 300 million (€40m) more on food, beverages, personal hygiene and chemicals than at the same time last year, the GfK market research agency says.

Analysing 20 million shopping baskets, or ranges of products sold in the reported period, GfK found that Croatians mostly bought salt, frozen ready-to-eat meals, tinned meat and fish, wine and spirits.

The list of 20 products with the highest increases in sales is topped by salt, with a sales increase of 290%. Flour and yeast, which, along with toilet paper, have become synonymous with "coronavirus shopping", ranked 6th and 7th respectively, soap ranked 20th and toilet paper was 31st among 130 products analysed.

In the first three weeks of coronavirus shopping frenzy, wine and spirits sold better than soap. Delicatessen salads, rice, tinned fruit and vegetables, sugar, creams and lotions, cakes and toilet cleaning agents also recorded excellent sales.

On the other hand, fish delicatessen and hair removers topped the list of 20 products that recorded the sharpest drops in sales in the first three weeks of the coronavirus epidemic. Frozen fruit, fresh bakery products, sparkling water drinks, beer and boxes of chocolates also sold less.

Online sales increased by as much as 51%, while farm produce markets saw their sales decline by 8%. Bakeries and small retail shops also saw their market shares shrink.

The retail chains Konzum Super, Konzum Klik, Plodine, Spar, Tommy, dm and Bipa increased their market shares during the reported period.

The survey has showed that shoppers aged below 34 did not spend a penny more than they normally do, those aged 35-40 slightly increased their spending, while those above 45 spent considerably more.

More coronavirus news can be found in the Lifestyle section.

Wednesday, 11 March 2020

Retail Trade Turnover in January Jumps 6.2%

ZAGREB, March 11, 2020 - In January 2020, as compared to January 2019, retail trade turnover was 6.2% higher in real terms, which was the highest annual increase since February 2019, when it increased by 8.7%, the Croatian Bureau of Statistics said on Wednesday.

In January 2020, the total seasonally and working-day adjusted retail trade turnover was 2.7% higher than in December 2019 in real terms.

The real retail trade turnover has been growing since June 2019. In December 2019, the annual growth was 4.5%.

In January 2020, as compared to the same month of the previous year, retail trade turnover of food, beverages and tobacco increased by 4.3% and of non-food products (except of automotive fuels and lubricants) by 8%.

All trade branches realised a growth and the total gross retail trade turnover increased by 8.4% in nominal terms, as compared to January 2019.

The largest impact on the growth in the nominal turnover in January 2020, as compared to January 2019, according to unadjusted indices, was realised by non-specialised stores with food, beverages and tobacco with a growth of 7.9% in turnover as well as automotive fuels and lubricants recording a growth in turnover of 13.1%.

Raiffeisenbank Austria analysts say the latest data reflect the higher optimism in trade registered at the end of 2019. Moderate inflation, favourable conditions on the labour market and a high inclination to consumption have confirmed expectations that retail trade would have solid results in January 2020, they add.

They expect retail trade trends to remain favourable in Q1, while in the continuation of the year, notably in Q2, they expect it to be affected by the uncertainties and fears over coronavirus and its impact, notably on tourism turnover.

More economic news can be found in the Business section.

Tuesday, 25 February 2020

Taxpayers' Association Against Ban on Sunday Work

ZAGREB, February 25, 2020 - The taxpayers' association Lipa is against a ban on Sunday work because it would have a negative impact on the economy, the association's representatives said at a news conference on Tuesday, presenting Lipa's Competitiveness Barometer.

By presenting the Competitiveness Barometer the association wants to promote the process of adoption of decisions on economic policies in Croatia.

Lipa president Davor Huić said that Croatia's long-term growth potential was below one percent and that some of the reasons were the inefficiency of the public sector, high taxes, and a poor business climate.

"There is no strong focus on economic growth, many governments do not work on that at all," he said.

Huić noted that emigration would be stopped if Croatia were to reach 80% of the EU average standard of living.

"Croatia has been lagging behind EU member states that joined the bloc in 2005 for 15 years. We responded wrongly to the crisis in the period between 2009 and 2014. Other countries adapted to it much better. Our goal must be to reach 80% of the EU average standard of living by 2030. This and any future government will have to work for that to happen," he said.

While Croatia is at 60% of the average EU standard of living, countries that joined the EU in 2004 are at 75%, Huić said, noting that the country's economy growing at a rate of one percent would keep motivating people to emigrate and make Croatia a poor country.

One of the problems is that too few people work, he said.

A professor of political economy at the Zagreb Faculty of Political Science, Kristijan Kotarski, believes that restricting Sunday work would have a negative impact on Croatia's position in the global competitiveness ranking.

It could redirect consumption onto mostly foreign-owned online platforms, as well as cause a part of turnover to spill over to neighbouring countries, he said.

Kotarski also mentioned the significant impact of tourism and commerce on the national economy, noting that Croatia's economy was more dependent on commerce than other EU countries.

As for planned changes to the Commerce Act that would introduce restrictions on Sunday work and allow shops to work 8 to 12 Sundays a year, he said that they would only lead to confusion among domestic and foreign consumers.

He recalled that two bans on Sunday work had already been introduced but were abolished by the Constitutional Court as well as that Hungary in 2015 banned Sunday work, only to reintroduce it in 2016.

More business news can be found in the dedicated section.

Sunday, 19 January 2020

Croatian Producers Sell 74 Million Euro Worth of Products Through SPAR

ZAGREB, January 19, 2020 - Croatian producers sold 74 million euro worth of products through the SPAR retail chain in Italy, Hungary, Austria and Slovenia in 2019, which is 5% more than in 2018, SPAR Croatia said in a statement this past week.

The largest increase in sales was recorded in Italy.

It was not just large companies, but also medium-sized and small businesses that successfully marketed their products through SPAR's retail network.

Among the large producers were the food company Vindija, the aquaculture company Cromaris, confectioner Kraš and the hygienic products company Logistika Violeta.

Vindija increased its exports to Slovenia by 16%, Cromaris' exports to Austria and Slovenia rose by 13% and 17% respectively, Kras saw its exports to Slovenia grow by 3%, while Logistika Violeta increased its exports to Austria by 19%.

Small and medium-sized enterprises also recorded increased exports.

Prosciutto producer Pršut Voštane recorded an increase in exports to Slovenia of as much as 62%, while the Ekos bakery chain saw its exports rise nearly fourfold. Pisinium, a company that makes premium truffle sausages, increased its exports to Slovenia by 95%, while the Zigante Tartufi company's exports to Italy rose by 14%.

More business news can be found in the dedicated section.

Thursday, 2 January 2020

Croats' Spending Reaches 16 Billion Kuna in December

ZAGREB, January 2, 2020 - During December 2019, Croatians spent nearly 16 billion kuna, according to figures provided by the Finance Agency (FINA) to the Croatian Chamber of Commerce (HGK) on Thursday when the chamber pointed out that spending this December was a billion kuna higher than in December 2018.

During December 2019, FINA processed receipts worth 15.8 billion kuna, and this means that we spent a billion kuna more than in December 2018, says Tomislava Ravlić of the HGK.

This positive trend in spending is a result of the steady rise in wages due to the tax reforms, she explained.

Also, the analysis of the expenditure on Christmas presents shows that two thirds of Croatians spent between 100 and 1,000 kuna on those presents, and one fifth set aside higher amounts of money for that purpose.

As much as 31.5% of those polled spent between 100-500 kuna on Christmas presents for their dearest ones, whereas 31.8% spent between 500 and 1,000 kuna for that purpose, and 20.8% spent more than 1,000 kuna, Ravlić explained.

Also, every tenth respondent says they spent less than 100 kuna on presents in December, and a mere 2.3% of those polled say they have not bought any presents at all.

Broken down by type of recipients of presents, family members top the list (84%) and are followed by those who are described as loved ones (56%) and friends (53%), while the lowest percentage went on business partners (17%).

Broken down by type of goods purchased as presents, cosmetic products top the list (39%), followed by clothes and footwear (35%) and children's toys (31%), the HGK says.

The survey was conducted among 300 respondents in four big cities: Zagreb, Rijeka, Osijek and Split.

More economy news can be found in the Business section.

Monday, 30 December 2019

Big Shopping Centres Against Banning Sunday Work

ZAGREB, December 30, 2019 - After Economy Minister Darko Horvat announced on Christmas that Sunday work would be restricted and Prime Minister Andrej Plenković confirmed it on Saturday, Croatia's leading shopping centres are appealing against that, claiming the damage will be incalculable, Jutarnji List reports on Monday.

The government's analyses are incorrect and will damage the economy, the daily says, quoting Denis Ćupić of the management of Westgate, the largest shopping centre in the European Union, and Slobodan Skolmik, chairman of the Board of Emmezeta, the second largest furniture retailer in Croatia with 981.4 million kuna in revenue in 2018.

They say Sunday revenue is higher, not lower as claimed by the government. People will buy more online from other countries, which will reduce state budget revenues, they warn, adding that there is no Austrian model of partial Sunday work as Sunday is a non-working day there.

Minister Horvat said he would present "a very interesting analysis" that would result in a new law regulating Sunday work and that the proposal would be based on the Austrian model, meaning that a certain number of Sundays would be working and a certain number non-working days.

Prime Minister Plenković told Jutarnji List that an analysis by the finance and economy ministries showed that Sunday turnover was 41 to 52 percent lower on average than on other days.

Neither the Croatian Chamber of Commerce (HGK) nor the Croatian Employers Union (HUP) have a uniform stand on Sunday work.

Tomislava Ravlić of the HGK says retail is a broad term and therefore there are different takes on Sunday work. We are waiting for the government's proposal and then we will be able to be more specific, she says, adding that they expect some data already on Monday.

Lea Šćrbec of the HUP says they too are waiting for concrete proposals from the government before giving an answer, according to Jutarnji List.

More economy news can be found in the Business section.

Saturday, 30 November 2019

Croatians Expected to Spend 15.3 Billion Kuna over Coming Holidays

ZAGREB, November 30, 2019 - Croatian citizens are expected to spend 15.3 billion kuna over the coming holidays, 500 million kuna more than a year ago, the Croatian Chamber of Commerce (HGK) said on Saturday.

The estimate refers to the period from December 1 to January 1. Retail is the main driver of the holiday consumption and it is estimated that it will generate about 14 billion kuna, Tomislava Ravlić of the HGK told a press conference.

The 15.3 billion kuna spending estimate is based on the tax reform and wage growth, another good tourist season, higher consumer optimism and record-high employment, she said.

For the past ten years, December has been the period of highest spending in a year, Ravlić said, adding that 8-10 billion kuna was spent during the "classic" months and up to 14 billion kuna during July and August in record tourist seasons.

The highest spending in December is recorded in the week before Christmas, she said.

Retail has been stable for the past five years and turnover has been recording growths since August 2014, with the exception of four months of decline and one of being stable, Ravlić said, adding that in the first nine months of this year trade was 3.7% higher than at the same time in 2018.

She also underscored changes in consumer habits. Previously, the majority of citizens worried about the cost of living, whereas now the majority (29%) prioritise health, 21% the cost of living and 20% the work-life balance.

"This tells us that the economy has stabilised and that consumer optimism has increased and that, despite problems, our citizens live better, i.e. that the standard is better," Ravlić said.

She also mentioned that in Europe 50% of the people who use the Internet also shop online, as against 27% in Croatia.

More economy news can be found in the Business section.

Wednesday, 17 April 2019

Prices Rise Regardless of VAT Reduction

ZAGREB, April 17, 2019 - The Independent Trade Unions of Croatia (NHS) on Wednesday said that this year's Easter hamper will be more expensive despite the reduced VAT rate on certain items.

The NHS has calculated the cost of three Easter hampers - a modest one, worth 703 kuna, which is 36 kuna more than last year, a medium-sized hamper of 1,225 kuna, up 1 kuna from last year, and a rich hamper, valued at 1,824 kuna or 109 kuna more than last year.

The contents of the hampers differ according to the type of meat and fish and whether they include certain food items such as cakes, sweets, nibbles and beverages.

The rich hamper includes more expensive items such as cod, lamb and cooked ham, the medium quality hamper contains cheaper fish and meat such as whiting, pork and rolled ham, while the modest hamper contains cheaper pork cuts and the cheapest fish on the market, such as sardines.

The consumer basket indicates that on average the price of quality products has increased, the price of unprocessed food has remained fairly stable while the price of processed or semi-processed products has fallen slightly. With regard to basic foodstuffs, their prices have remained fairly stable and some have recorded a slight increase, the NHS said.

"As for average prices and the most frequent prices surveyed, we cannot say that they have fallen for products whose VAT was decreased by the latest tax changes," the union federation said in a press release.

More retail news can be found in the Business section.

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