Over half of Romanian stores’ profits goes abroad, study shows

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Large foreign retailers, active on the local market, generate more than half of the profits made by all consumer goods retailers. Paradoxically, although 99.6 percent of traders are Romanian companies, they fail to produce half of the profit of the entire domain, according to a Creditinfo Romania study, capital.ro informs.

In this context, although the traders with foreign capital in Romania account for only 0.4 percent of the market, they generate 56 percent of the companies’ profits that operate in retail trade in non-specialized stores. Obviously, this money reaches the retailer’s home countries.

The study also shows that, despite the difficult situation of domestic companies in the non-specialized retail trade, 3 percent of companies can face the growing competition of foreign companies. Thus, half of the Romanian companies’ profits are generated by these powerful local firms.

Of the foreign companies, the highest profits are made by those with German capital – 38 percent, followed by companies with French capital – 10 percent and those with Dutch capital – 7 percent. 43 other nationalities draw the remaining below 1 percent of the profit generated by the entire domain.

Profit tax generated by the companies in the analyzed field is 100 percent for Romania’s budget, but it represents on average only 16 percent of the total profit, plus the eventual dividend tax, but most of the value is at the disposal of the associations (or shareholders, as the case may be).

The struggle between Romanian and foreign companies is also on the sales side, with the two dominant types of capitals sharing their market share. Thus, less than half (48 percent) of the purchases are carried out in stores with predominantly Romanian capital and over half (52 percent) -in those with foreign capital, of which the most relevant are still those with German capital – 21 percent, Dutch capital – 19 percent and French capital – 11 percent.

Romanian companies are the ones that provide the most jobs in the field. Thus, out of over 180,000 people working in these companies, almost three quarters work in Romanian firms and only 30 percent in foreign ones.

The study also shows that the least profitable companies are those with Dutch capital, which have a margin of profit of only 1.27 percent, followed by the Romanian ones at a general level, by 2.04 percent. French companies have a profit of 3.04 percent while those in Germany of 6.25 percent.

As regards the short-term debt payments, Romanian companies have by far the slowest speed – over 110 days. French companies pay their debts in about 98 days, the Dutch in 67 days, while the German companies top again with 48 days.

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