Retail sales, which include traditional stores, marketplaces and modern retail networks, could increase by 16.5% this year, and reach 121.7 billion RON (38 billion euros), with more than half the sum accounted for by food sales.

Last year, Romanian retail reported a 17.8% growth rate and reached 104.4 billion RON (31.3 billion euros), according to a study conducted by PMR, a Polish-based consulting and market research company.

"The fast growth of modern retail formats, the high interest of foreign investors, and an increase in consumers' incomes have turned Romania into one of the most promising retail markets in Europe. Although Romania adopted market economy principles several years ago, retail is a long way off saturation point, with many networks still competing for prominence and places within the top rankings," believe PMR analysts.

The most rapid growth rate was posted in 2007 on the food segment, which registered a 27.8% rise and climbed to 61.1 billion RON (18.3 billion euros). Last year, the population's spending on food (excluding costs related to fuel and transport) accounted for over half of overall spending.

"This situation, which is unusual for a developed economy, is due to a decline in the importance of homemade food. Additionally, the price increases on food (the result of a poor harvest) contributed to rising expenditures, as consumers found it difficult to consume less," the study reveals.

Last year, modern retail networks (hypermarkets, supermarkets, discount stores and cash & carry units) accounted for 37.6% of overall food sales, up from 35.5% in 2006. According to PMR estimates, traditional stores accounted for as much as 55.5% of food sales, and marketplaces for 6.9%.

Among modern networks, cash & carry stores continued to be the leading format in 2007, and accounted for 13.3% of food sales, followed by hyp