Innovative solutions for finding and drawing clients, adjustment of shopping areas to the new market conditions, saving both at the level of population and of Government or major investment in agriculture are only a few of the weapons of the retail industry to battle financial crisis in the coming years.
95% of the retail credits are blocked
Banks have currently blocked 90% of the retail credits and 90% of the loans granted to companies, measure combined with a fast paced growth of delinquent loans rate, from 2-3% up to 10-15%, said Dragos Cabat, chairman of CFA Romania (photo), at the third edition of Romania Retail Forum event organized by Mediafax.
“This situation will lead to blocked funding lines, many investment projects following to be put off”, Dragos Cabat added.
According to him, the financial crisis will trigger a fall of demand, and an adjustment of retail activity and FMCG production.
“Clearly, things are happening. And this is noticed by foreigners. Thus, American consumers have reduced expenses by 60%. The fall of demand will implicitly lead to an adjustment of retail spaces. All in all, I think the moment of crisis is also a good opportunity for those who are adapted to competition environment”, Cabat added.
“Retailers will have to find innovative solutions for funding and for drawing clients, to target ‘consumption-starved’ people. We will need up to 2-3 years to go into an uptrend , as nowadays the consumption is melting down”, said Cabat.
Some of the solutions proposed by CFA chairman were the reduction of profit margins, adjustment of shopping spaces to the new market conditions, financing towards and from providers, in the lack of financing in the banking system.
