Rusmir Sendić, PhD, Professor Assistant
School of Economics and Business University Sarajevo
Trg oslobođenja - Alija Izetbegović 1
71000 Sarajevo, Bosnia and Herzegovina
Phone: +387 33 275 938
Fax: +387 33 275 969
E-mail address: rusmir.sendic@efsa.unsa.ba
Emir Kurtović, PhD, Professor Associate
School of Economics and Business University Sarajevo,
Trg oslobođenja - Alija Izetbegović 1
71000 Sarajevo, Bosnia and Herzegovina
E-mail address: emir.kurtovic@efsa.unsa.ba
Phone: +387 33 275 937
Fax: +387 33 275 969
Adi Alić, Teaching Assistant
School of Economics and Business University Sarajevo,
Trg oslobođenja - Alija Izetbegović 1
71000 Sarajevo, Bosnia and Herzegovina
E-mail address: adi.alic@efsa.unsa.ba
Phone: +387 33 253 752
Fax: +387 33 275 969
GLOBAL CRISIS INFLUENCE ON RETAIL IN
COUNTRIES IN THE SEE REGION
ABSTRACT
Although the global crisis started in the economically leading parts of the
world (primarily in the USA), due to the domino effect it has progressively
spread to the rest of the world, including the SEE region. Besides, although
the sources of global crisis can primarily be found in the financial markets,
the faltering of world economy was very fast and systematically transferred
to other sectors, particularly the significant sector of trade and retail. Thus,
the subject of the paper is the analysis of the global recession influence on
retail in the SEE region countries. The goal is to view the influence of global
recession on business performances and competitiveness of players in trade,
by analyzing indicators of retail trade effects at the individual countries' level
(share in GDP, employment, turnover in retail, number of retail stores, etc.).
The paper will also attempt to analyze the global crisis influence on the
process of trade internationalization within the region. The significance of
this research is in its empirical contribution to better understanding of the
conditions the retail sector in these countries is in, hit by the crisis effects, as
well as in considering possibilities of efficient functioning in given
circumstances. Besides, the research is significant in that the obtained results
may serve as a basis for future studies, and for a number of conclusions
essential in a practical sense, and needed to define prospects of a way out of
the crisis.
Key words: Global crisis, retail trade, trade, globalization, internalization
1. INTRODUCTION
One of the crucial areas of contemporary economic and marketing practice in
general is that of trade, with a particular focus on the fest growing sector of
retailing. It is an area which presently reveals numerous essential specifics of
marketing, and it is therefore necessary to select and carry out suitable
strategies aimed at long-term sustainability and development. The dynamics
of internal and external factor imposes a need for the situational analysis
(current context analysis) to play a strategic role in making decisions in the
area of trade both by companies and by economic policy developers. The
question as to how the current global economic crisis has affected the trade
sector is the major issue that initiated this research. Thus, the paper is aimed
at providing an overview of the present position of trade sector defined by the
impact of crisis, in order to be able to propose further directions and
prospects of trade development, primarily aimed at overcoming negative
effects due to global recession in the analyzed SEE countries. Besides, the
objective of the research is certainly the possibility to use the paper findings
as a basis of future studies, and making operational decisions at a level of
trade, and decisions by economic policy creators in the SEE countries.
The subject of the research is an overview of the general influence of global
economic crisis, and the analysis of its influence on individual aspects of
wholesale and retail trade within the selected SEE countries. The basic aim is
to identify and analyze the crisis influence on a few most significant
indicators in the area of trade, and mutual comparison of the crisis influence
in different countries of the given region. In this way, it is possible to draw
valid and useful conclusions on the current conditions, and guidelines for the
future development for all the actors in the area of trade.
2. THEORETICAL BASES
What is called the financial crisis is only the tip of an iceberg, i.e. the
manifestation of a far graver crisis. The crisis marks the start of a process of
disintegration of the existing “way of manufacturing”, which can in simple
terms be describes as a consumer society and its globalization, and an
extremely uneven distribution of goods on the world scale (Papić, 2009, 7).
At a microeconomic level, recession has particularly affected the elements of
the competitive advantages diamond pertaining to factor conditions (capital
availability and price, job security and disturbances in the labor market,
development of universities and other advanced factors) and market
conditions (decrease in local and export demand for export-oriented
businesses). However, all the other elements of business environment are
threatened as well. Besides, recession has prominent sectoral implications
and affects individual industries differently (Domazet, 2009, 177).
Today, the view on the mutual dependence between the development of trade
and its economic, i.e. general social environment has been generally
accepted. A special significance of trade can also be seen in its role in the
contemporary conditions of market functioning (Segetlija, 2006, 25). This
makes the analysis of global crisis influence on the trade sector even more
significant.
Due to sudden changes on the demand side, most goods markets will be
destabilized under the influence of global economic crisis. The decrease in
demand for most goods will in the first stage lead to a surplus of supply and
the accompanying price decrease. Cost of stock will increase and retailers’
liquidity decrease. Retailers will respond by decreasing their orders, which
will be reflected on the decrease in production and utilization of resources.
Imports, exports and local manufacturing will decrease (Miljević, 2009, 106).
For a very long time period, marketing theory and practice did not attach
sufficient significance to marketing channels. The attention was typically
directed to other strategic elements, i.e. product, price and promotion.
However, over the last two decades such a view has experienced significant
changes, particularly in more developed market economies. Moreover, the
marketing channel strategy in company business is becoming a priority
compared to other elements of marketing mix. The shift of economic course
from production to the distribution sphere has become obvious, particularly
to the retail stage of sales channels.
The changes have been so significant that they have actually completely
changed the traditional concept of trade, and we van therefore legitimately
speak of a distinctive trade (particularly retail) revolution, rather than
evolution. Trade has been transformed from a passive and simple mediator
into a very active player, with multiple effects on the functioning of entire
economy and market in general (Lovreta, 2009, 1-9). Thus, it is claimed that
it is an indisputable fact that the West European market is also witnessing
intense processes of stronger domination of the role of trade, particularly
retail in the vertical exchange mechanism (Dawson, Findlay and Sparks,
2008, 273-342).
The paper starts from the generally accepted classification from the
viewpoint of position and role, i.e. trade classification into wholesale and
retail trade. Indeed, the trade development in a country should be viewed
through changes in its structure, above all in terms of retail and wholesale
forms; on the other hand, trade growth is viewed only in quantitative terms of
the increase in its effects,, regardless of the structure and changes of retail
and wholesale forms (Segetlija, 2006, 394).
Retailing, as a specific subject of our interest, pertains to retail trade as the
last stage of marketing channels, i.e. it is the last organized stage in
marketing channels where a direct or indirect contact is established between
manufacturers and end users (Berman and Evans, 2006, 7-9).
Contemporary retailing is a local and global activity in the same time. As
such, it is becoming increasingly specific and harder as a distinctive
challenge for managers, consumers, society, state and academic community.
As a tertiary and labor-intensive industry, retailing should develop in
accordance with the development of manufacturing and consumption. Its role
in economic development is constantly increasing (Lovreta, 2009, 305-310).
In the new millennium, retailing is becoming an exciting, complex and vital
business sector in most developed and developing countries (Krafft and
Mantrala, 2006, 1). At present, the increasingly competitive market brings
about the increasing significance of retailing for all traders, not only for those
offering sophisticated, high-value products. Retailing is also a service and has
an essential significance in services provided to consumers (Fernie, Fernie
and Moore, 2003, 249).
It is absolutely certain that the 21st century will witness significant changes in
trade environment, which will result in the creation of new frameworks and
conditions for the development and functioning of trade and market in
general. An analysis of indicators of the effects of retailing and trade in
general at individual countries’ level is important because of the estimate of
the conformity between the achieved level of retailing development with the
level of the overall economic development. This information is important
both for economic players in the area of trade (who want to expand) and for
the economic policy drivers. Due to a number of specific factors that pertain
to trade and that can serve as valid indicators of the achieved level of the
development of trade, particularly of the growing retailing sector, it is
necessary to pay a significantly greater attention to empirical studies of this
phenomenon.
3. RESEARCH METHODOLOGY
The basic aim of the research is to explore and point to basic indicators and
potential problems due to global crisis, as well as to give prospects of
development in the area of retailing and trade in general in the SEE countries.
The study pertains to data characteristic of four SEE countries: Croatia,
Slovenia, Serbia, and Bosnia and Herzegovina. The analyzed period from
2006 to 2009 mainly includes years when the listed countries carried our
major transition reforms and reforms on their road to the European Union,
and the period which unavoidably witnesses effects of global economic crisis
in all the areas of economic development, including the trade industry.
The research is focused on the analysis of strategically most significant
mutual dependencies (economic indicators and the position and role of trade)
that are evident in the SEE countries. First, it analyzed the global economic
crisis effect on the conditions of economies in the analyzed SEE countries,
through a dynamic presentation of selected socioeconomic development
indicators. This issue is raised in order to be able to observe and understand
the general effect of recession on a country’s economic position. Secondly, it
provides a thorough overview of the role and significance the trade sector has
in the countries’ economies, expresses through the share of gross value added
achieved in the trade sector in the total gross value added. Thirdly, it
measured the global crisis effect on individual aspects of wholesale and retail
trade, i.e. employment, achieved sales and the number of stores and service
shops in the wholesale and retail trade in the analyzed countries.
The significance of the research is twofold. First, it is reflected in that it gives
an empirical contribution to the better understanding of the significance and
role trade in general has in the countries’ economy, understanding of the
achieved level of trade development in the analyzed SEE countries, and
effects the global recession has had on trade and economy of the analyzed
countries in general. Secondly, the research is significant since the obtained
results can serve for creating a basis for future research, and for drawing a
number of conclusions significant for creating guidelines for further
development and a way out of global crisis, and ones significant in a practical
sense.
The descriptive analysis of certain indicators pertains to a recent period, i.e.
the period from 2006 to 2009, while certain aspects of the analysis are
significantly conditioned by the availability of data on individual countries.
The paper used secondary data, mainly those from national official statistics,
as well as data of given official agencies (EUROSTAT1). These are mostly
data on the wholesale and retail trade, based on NACE2 activity
classification. The selected secondary data were subjected to normative
method aimed at describing trade characteristics and comparison of these
characteristics between the selected SEE countries. Besides the objective
ones, the comparative method also implies the subjective methods of
analyzing and interpreting the available data. Methodological principles were
defined with the aim of conducting an analysis of the position and capability
of the existing infrastructure to adjust, as fast as possible, to the changed
relations in marketing channels in the global market.
4. DATA ANALYSIS AND DISCUSSION
In order to successfully perceive and understand the role and significance of
global crisis impact, we will first analyze the basic indicators pointing to a
country’s socioeconomic position, and then the indicators pertaining to the
trade sector within the selected SEE countries. It should be added that most
analyzed countries are undergoing a deep crisis due both the global recession
effects and certainly the direct historical events and post-war events in these
regions.
1
http://epp.eurostat.ec.europa.eu
NACE is an acronym derived from the French name for EU economic activity
classification: According to the NACE activity classification: G-52 Retail trade, excluding
trade in motor vehicles and motorcycles; repair of objects for personal and household use.
2
Table 1. Main socioeconomic indicators for the selected SEE countries
COUNTRY
SLOVENIA
CROATIA
SERBIA
BOSNIA AND
HERZEGOVINA
YR.
GDP
(mil.€)
Turnover
in
distributive
trade
(mil.€)
EXPORTS
(mil.€)
IMPORTS
(mil.€)
EMPLOYMENT
2006
31.050
24.094
18.501
19.227
934.200
2007
34.568
27.323
21.964
23.027
962.300
2008
37.305
28.329
23.204
25.180
988.900
2009
35.384
23.339
18.768
19.004
970.200
2006
39.102
31.524
16.970
19.712
1.467.876
2007
42.833
36.946
18.328
21.567
1.516.909
2008
47.370
39.774
19.852
23.818
1.554.805
2009
45.379
34.342
16.377
17.885
1.496.784
2006
23.305
25.315
5.102
10.463
2.025.627
2007
28.785
31.475
6.432
13.507
2.002.344
2008
33.418
33.398
7.428
15.494
1.999.476
2009
29.967
30.671
5.961
11.505
1.889.085
2006
9.843
8.785
2.878
5.828
811.000
2007
11.126
10.163
3.660
6.766
849.000
2008
12.630
11.995
4.085
7.717
890.000
2009
12.145
10.559
3.389
5.874
859.218
Sources: (1) Eurostat, http://epp.eurostat.ec.europa.eu, DATABABE: Candidate countries
and potential candidates: short-term business statistics (cpc_insts) , accessed: 24.04.2010.,
15:44:58; (2) Federal Office of Statistics, Federation od Bosnia and Herzegovina,
http://www.fzs.ba, accessed: 12.11.2010., 09:48:45; (3) Statistical yearbook 2009, Institute
of Statistics, Republic of Srpska, Banja Luka, p. 225. (4) Agency for Statistics of Bosnia and
Herzegovina, Foreign trade 2009, Thematic Bulletin 06, Sarajevo, p. 15; (5) Agency for
Statistics of Bosnia and Herzegovina, Foreign trade 2007, Thematic Bulletin 06, Sarajevo,
p.15; (6) Statistical Office of the Republic of Slovenia, http://www.stat.si/, accessed:
12.11.2010., 12:25:59;
By all accounts, recession of the world and European economy of 2009 did
not bypass the West Balkans. The available sectoral and foreign trade data
point to the real decrease in economic activity during 2009.3
Table 1 gives a dynamic overview of the basic socioeconomic indicators of
SEE countries. The aim is first to understand how the global economic crisis
reflected on the general economic picture of the countries. It can be observed
that all the indicators in all the countries register growth until 2009, which is
taken as the reference year when global crisis effects were felt (end of 2008 is
typically taken as the start of global crisis).
3
European Commission, DG. (2009): ECFIN Economic Brief: At a turning point?
Assessing the first positive signals for the euro-area economy, Issue 4, p. 2.
GDP in the analyzed countries registers a constant and significant growth
until 2009. Average annual GDP growth rates in the 2006-2008 period are
10% for Croatia, 13.3% for Bosnia and Herzegovina, 9.6% for Slovenia, and
19.7% for Serbia. In 2009, however, GDP registered a significant decrease,
with the greatest fall in GDP value in Serbia, where the chain index
amounted to 0.90, and decrease rate to 10.33%. It seems that the global crisis
in terms of GDP, at least in the observed period, least affected Bosnia and
Herzegovina.
The situation is similar in terms of sales achieved in the countries’ local trade
(wholesale and retailing). The achieved sales registers constantly positive
change rates, but a decrease is registered in 2009, which was the most
obvious in Slovenia, 17.61%, having in mind the fact that Slovenia had the
least annual sales growth rate, that of 8.4%, in the 2006-2008 period. The
least decrease was registered in Serbia, where the rate of decrease in local
trade sales in 2009 compared to 2007 amounted to 8.17%.
Table 1 also reveals that these are the countries characterized by negative
foreign-trade balance. Slovenia, as the only European Union member
country, was decreasing the difference between export and import values
every year. All the countries registered positive imports and exports rates in
the 2006-2008 period, though with a trend of their decrease. In 2009, the
values of exports and imports decreased, which more than eliminated a very
strong contribution of the foreign sector balance to these countries’ economic
growth.
Contrary to the previous period, when the analyzed SEE countries registered
a decrease in unemployment accompanies by a significant increase in
employment, this trend changed in 2009. Decrease in the industrial
production, exports, trade and the scope of construction logically resulted in a
significant decrease in employment.
Graph 1: GDP and share of gross value added achieved in the trade sector4 in the total
gross value added of the selected SEE countries in 2009
Sources: (1) Eurostat, http://epp.eurostat.ec.europa.eu, DATABABE: GDP and main
components - Current prices (nama_gdp_c), accessed: 10.11.2010., 11:59:38; National
Accounts by 31 branches - aggregates at current prices (nama_nace31_c), accessed:
10.11.2010., 11:30:10; (2) First release, number 1, Agency for statistics fo Bosnia and
Herzegovina (www.bhas.ba), Sarajevo, 20.07.2010., pp. 4-6; (3) Statistical Office of the
Republic of Serbia, http://www.stat.gov.rs/, accessed 10.11.2010., 15:55:17; (4) Croatian
bureau of Statistics, Republic of Croatia, http://www.dzs.hr/, accessed 10.11.2010.,
14:20:44;
The significance of trade in the structure of economy can be observed
through its contribution to given macroeconomic indicators. These include
indicators such as: a) indicators of contribution to generation of gross
domestic product; b) indicators of contribution to employment; c) indicators
of share in the total number of enterprises; d) indicators of contribution to
generating value added; e) indicators of tax collection spots, and f) indicators
of share in total population consumption (Knego, 2004, 95).
In order to successfully understand the significance and role that trade in
general has in the analyzed countries’ national economies, and make
comparisons between them, for the purposes of this paper we used data on
national GDP, and shares of gross value added achieved in the trade sector in
the total gross value added of the countries. The analysis mostly covered the
SEE countries created upon the dissolution of the Socialist Federal Republic
of Yugoslavia. What is common for all these countries is the fact that they
are undergoing thorough market and democratic reforms, and are still
4
According to NACE activity classification: G. Wholesale and retail trade, repair of motor
vehicles and objects for personal and household use.
candidates for entering the EU and that in this context they are the best
subjects for comparison. Naturally, Slovenia, Bulgaria and Romania have
already secured the EU membership, and in this sense can contribute to the
analysis and comparison, in order to understand the position and role that
trade has in “more developed” countries.
First of all, Graph 1 reveals that the relative share of gross value added
generated by the trade sector in significantly higher in most of the less
developed transition countries than in those with higher GDP. Practically, the
higher an individual country’s GDP, the lower the share of GDP generated by
the trade sector. It does not necessarily point to the fact that trade has a
greater role and significance in countries with lower GDP compared to
developed countries. It can be a clear indicator of underdeveloped production
in these countries. Besides, these indicators point to the fact that consumption
in less developed countries is not conformed to the trend in the country’s
development level.
The share of gross value added achieved in the trade sector in the total
achieved value added is lower in Croatia compared to all the other shown
countries. On the other hand, the trade sector seems to play the most
significant role in GDP generation in Bosnia and Herzegovina.
If we analyze wholesale and retail trade taking into account the total
employment, and the share of the employment in these sectors in the total
employment, we can observe that the global crisis had a significant effect in
this area. Countries at a higher stage of development (Slovenia) do not lag
behind less developed countries as was the case in the previous GDP analysis
(Table 2), although it is known that at higher levels of economic development
the employment in distributive trade stagnates or even decreases, due to the
fact that more modern and economical forms of trade simply lead to
squeezing out the older and less economical ones, which also results in the
stagnation or decrease in employment (e.g. e-commerce). The reasons should
primarily be sought in the achieved high level of development of trade sector
in more developed countries, and their focus on further development of other
service sectors. One should not ignore the fact that these countries, led by the
globalization process, make significant investments in other, particularly less
developed countries, and expands in this way, particularly in the trade sector
(distributive trade).
Table 2: Total employment in the wholesale and retail trade and share in the total
employment in the selected SEE countries, 2006-2009.
COUNTRY
Slovenia
Croatia
Serbia
Bosnia and
Herzegovina
Employment
(000)
YR.
Share in total
employment (%)
TV*
TM**
TV+TM
Total
TV
TM
TV+TM
2006
37.905
53.817
91.722
934.200
4,06
5,76
9,82
2007
39.525
55.572
95.097
962.300
4,11
5,77
9,88
2008
42.523
58.079
100.602
988.900
4,30
5,87
10,17
2009
42.278
57.221
99.499
970.200
4,36
5,90
10,26
2006
94.506
88.449
182.955
1.467.876
6,44
6,03
12,46
2007
98.669
97.670
196.339
1.516.909
6,50
6,44
12,94
2008
102.518
101.100
203.618
1.554.805
6,59
6,50
13,10
2009
85.163
102.959
188.122
1.496.784
5,69
6,88
12,57
2006
113.571
59.955
173.526
2.025.627
5,61
2,96
8,57
2007
114.600
57.235
171.835
2.002.344
5,72
2,86
8,58
2008
118.491
55.819
174.310
1.999.476
5,93
2,79
8,72
2009
114.673
53.986
168.659
1.889.085
6,07
2,86
8,93
2006
32.830
36.897
69.727
811.000
4,05
4,55
8,60
2007
42.645
43.681
86.326
849.000
5,02
5,14
10,17
2008
46.604
49.110
95.714
890.000
5,24
5,52
10,75
2009
45.140
50.027
95.167
859.218
5,25
5,82
11,08
Sources: (1) Croatian bureau of Statistics, Republic of Croatia, http://www.dzs.hr/, accessed:
11.11.2010., 13:21:47; (2) Statistical Office of the Republic of Serbia,
http://www.stat.gov.rs/, accessed: 11.11.2010., 15:55:17; (3) Agency for statistics of Bosnia
and Herzegovina, www.bhas.ba, accessed: 11.11.2010., 15:52:12; (4) Statistical Office of
the Republic of Slovenia, http://www.stat.si/, accessed: 11.11.2010., 12:27:59;
Notes:*TV – G-51 Wholesale and wholesale dealing, excluding wholesale in motor vehicles
and motorcycles; **TM – G52 Retail trade, excluding retail trade in motor vehicles and
motorcycles; repair of items for personal and household use.
Above all, according to the data shown in Tables 1 and 2, it can be observed
that the total employment in all the analyzed countries, and generally in all
the world countries registered a decrease in 2009, due to the global economic
recession, except in Serbia, which has been witnessing a slight trend of
decrease in employment ever since 2001 (average annual employment
decrease rate was 0.7% in the 2001-2008 period). Negative trends in the
global economic arena, expressed through the decrease in aggregate demand,
i.e. exports to main trade partners resulted in layoffs of a certain number of
employees by local manufacturers due to business profitability. As could be
expected, it was particularly the private sector that was exposed to such
changes.
Employment in the wholesale and retail sector was growing constantly over
the past few years. On the other hand, trade sector is one of the drivers of the
total employment increase in most analyzed countries. The greatest increase
in employment in both wholesale and retail trade in the 2006-2008 period
was registered by Bosnia and Herzegovina, 42% and 33% respectively,
which is a direct effect of the de-industrialization process and tertiary sector
development. Construction of shopping centers, growth of loans in the area
of trade, as well as inspection supervision (illegal work), are main causes of
the increase of employment in this field.5 On the other hand, the least
increase of employment in trade sector was registered in Serbia, where
employment in wholesale increased by 4.3%, and in retailing it decreased by
6.9%. In general, however, it should be noted that employment in trade sector
due to global crisis still decreased compared to the decrease in total
employment, which again confirms the fact on the economic significance of
this sector.
Table 3 shows sales achieved in retailing expressed per capita in the selected
SEE countries, and the influence global crisis had on sales in 2009. It can be
observed that Bosnia and Herzegovina had the lowest sales per capita
achieved in retail and wholesale trade compared to all the observed countries,
while the highest sales was registered in Slovenia, which agrees with the
achieved rate of development of given countries. It is interesting to note a
discrepancy that occurred in Croatia, where the share of employment in
retailing in the total employment is greater than in Slovenia (6.03%-6.08%
for Croatia versus 5.76%-5.90% in Slovenia), and we have a lower sales
achieved in retailing per capita in Croatia than in Slovenia. It points to the
fact that a more accurate analysis would require sales to be conformed to
product and service prices in individual countries. A similar discrepancy can
be found in Serbia, where the share of employment in retailing in the total
employment is almost half of that in Bosnia and Herzegovina, while on the
other hand the retail sales per capita in Serbia are more than double than
those in Bosnia and Herzegovina.
Table 3 quite clearly points to the thesis that countries with a higher value of
GDP per capita have a higher level of retailing standard, i.e. that sales per
capita achieved in retailing are greater. It is also quite clear that global crisis
reflected on the decrease in sales in general in all the analyzed countries. As
could be expected, the decreased household income and a decrease in
investment in 2009 inevitably led to the decrease in the local trade volume.
Bosnia and Herzegovina suffered the greatest loss of retail sales, with a
23.9% decrease of retail sales per capita in 2009 compared to 2008. It is
followed by Serbia, while Croatia and Slovenia are approximately the same.
5
According to: Directorate for economic planning. (2009): Bosnia and Herzegovina,
Economic trends, Annual report for 2008, Economic Policy Research Unit , p. 21.
Table 3. Wholesale and retail sales in the selected SEE countries, 2006-2009
Sales (mil.€ )***
COUNTRY
Slovenia
Croatia
Serbia
Bosnia and
Herzegovina
****
YR.
Sales per capita
TV*
TM**
TV+TM
Population
(000)
2006
9.408
7.977
17.385
2.003
4.697
3.983
8.679
2007
9.941
8.904
18.845
2.010
4.946
4.430
9.376
2008
14.075
10.763
24.838
2.010
7.002
5.355
12.357
2009
10.367
10.118
20.485
2.032
5.102
4.979
10.081
2006
15.205
9.864
25.069
4.440
3.425
2.222
5.646
2007
15.888
12.389
28.277
4.436
3.582
2.793
6.374
2008
18.082
14.205
32.287
4.434
4.078
3.204
7.282
2009
14.812
13.092
27.904
4.429
3.344
2.956
6.300
2006
14.031
8.112
22.143
7.412
1.893
1.094
2.987
2007
16.558
11.173
27.731
7.382
2.243
1.514
3.757
2008
17.436
11.634
29.070
7.350
2.372
1.583
3.955
2009
16.548
9.523
26.071
7.321
2.260
1.301
3.561
2006
4.870
1.949
6.819
3.843
1.267
507
1.774
2007
5.838
2.192
8.030
3.842
1.520
571
2.090
2008
6.784
2.618
9.402
3.841
1.766
682
2.448
2009
6.878
1.996
8.874
3.843
1.790
519
2.309
TV
TM
TV+TM
Sources: (1) Eurostat, http://epp.eurostat.ec.europa.eu, DATABABE: Population change :
absolute numbers and crude rates (demo_gind), accessed: 12.11.2010., 13:27:32;
(2) Croatian bureau of Statistics, Republic of Croatia, http://www.dzs.hr, accessed:
12.11.2010., 13:29:47; (3) Federal Office of Statistics, Federation od Bosnia and
Herzegovina, http://www.fzs.ba, accessed: 12.11.2010., 14:48:45; (4) Institute of Statistics,
Republic of Srpska, http://www.rzs.rs.ba, accessed: 12.11.2010., 15:03:55; (5) Agency for
statistics of Bosnia and Herzegovina, www.bhas.ba, accessed: 12.11.2010., 15:52:12;
(6) Statistical Office of the Republic of Serbia, http://www.stat.gov.rs/, accessed:
12.11.2010., 15:15:28; (7) Statistical Office of the Republic of Slovenia, http://www.stat.si/,
accessed: 12.11.2010., 15:44:57;
Note: *TV – G-51 Wholesale and wholesale dealing, excluding wholesale in motor vehicles
and motorcycles; ** TM – G52 Retail trade, excluding retail trade in motor vehicles and
motorcycles; repair of items for personal and household use; *** Sales have been calculated
from national currencies according to exchange rates of official statistics of central banks of
the analyzed countries; ****Data for Brcko District are missing from sales calculations,
except for 2009.
In the absence of a very significant statistical indicator, i.e. the size of sales
area in Bosnia and Herzegovina, as a very interesting and certainly essential
indicator of the degree of retailing development, we were forced to use
alternative data in order to complete our analysis. Thus, for instance, we can
observe the number of stores within the retailing sector, and calculate the
number of stores available for 1000 people in order to compare the global
crisis influence on retailing conditions in the context of selected SEE
countries (Table 4).
Table 4. Number of retail stores per 1000 people, 2006-2009.
COUNTRY
Slovenia
Croatia
Serbia
***
Bosnia and
Herzegovina
****
YR.
Number of stores
TV*
TM**
TV+
TM
2006
11.832
7.197
19.029
2007
11.917
7.126
2008
12.515
6.727
2009
12.890
2006
2007
2008
2009
2006
2007
2008
2009
Pop.
(000)
Number of stores
per 1000 people
TV
TM
TV+
TM
2.003
5,91
3,59
9,50
19.043
2.010
5,93
3,55
9,47
19.242
2.010
6,23
3,35
9,57
6.975
19.865
2.032
6,34
3,43
9,78
8.251
27.967
36.218
4.440
1,86
6,30
8,16
8.406
29.701
38.107
4.436
1,89
6,70
8,59
8.484
29.521
38.005
4.434
1,91
6,66
8,57
5.412
26.957
32.369
4.429
1,22
6,09
7,31
11.163
76.993
88.156
7.412
1,51
10,39
11,89
9.279
67.797
77.076
7.382
1,26
9,18
10,44
11.551
75.628
87.179
7.350
1,57
10,29
11,86
2.116
93.292
95.408
7.321
0,29
12,74
13,03
2006
3.285
3.754
7.039
3.843
0,85
0,98
1,83
2007
3.405
3.616
7.021
3.842
0,89
0,94
1,83
2008
3.764
3.919
7.683
3.841
0,98
1,02
2,00
2009
3.008
4.061
7.069
3.843
0,78
1,06
1,84
Sources: (1) Croatian bureau of Statistics, Republic of Croatia, http://www.dzs.hr/, accessed:
13.11.2010., 14:05:54; (2) Statistical Office of the Republic of Serbia http://www.stat.gov.rs,
accessed: 13.11.2010., 14:15:14; (3) Federal Office of Statistics, Federation od Bosnia and
Herzegovina, http://www.fzs.ba, accessed: 13.11.2010., 11:48:45; (4) Institute of statistics,
Republic of Srpska, http://www.rzs.rs.ba, accessed: 13.11.2010., 11:15:28; (5) Agency for
statistics of Bosnia and Herzegovina, www.bhas.ba, accessed: 13.11.2010., 15:14:11;
(6) Statistical Office of the Republic of Slovenia, http://www.stat.si/, accessed: 13.11.2010.,
13:24:29;
Note: *TV – G-51 Wholesale and wholesale dealing, excluding wholesale in motor vehicles
and motorcycles; ** TM – G52 Retail trade, excluding retail trade in motor vehicles and
motorcycles; repair of items for personal and household use; ***Due to a lack of information
for Serbia, data on the overall wholesale and retail trade were used, including the trade in
motor vehicles and motorcycles, repair of items for personal and household use; ****Data
for Brcko District are missing from sales calculations, except for 2009.
Same as in the previous aspects of analysis, a very significant influence,
though some difference in the intensity of global recession influence on the
number of stores and service shops in the trade sector of analyzed countries
can be observed here as well. Above all, one can observe that contrary to the
other countries, only Slovenia has a larger number of stores and service shops
in wholesale than in retail trade. Croatia and Serbia have a far greater number
of stores in the retail sector, while this ratio is almost equal in Bosnia and
Herzegovina. Furthermore, it is evident that Bosnia and Herzegovina
significantly lags behind the other analyzed countries, since the number of
stores per 1000 people ranges from 1.83 to 2.00, which is very low if we look
at Croatia (7.31-8.59) or Slovenia (9.47-9.78). The global crisis effect in this
domain is almost least expressed and the number of stores and service shops
seems to have remained unchanged in most countries.
Changes and transformations trade is exposed to in the contemporary
business conditions are numerous, with the global economic crisis effect
being one of the most significant influences. The possibility of trade
adjustment in individual countries will have significant implications on the
national and international functioning of entire economy. One of crucial
phenomena that require a significant attention in the analysis includes the
process of internalization which is, among other things, accompanied with
the entrance of global, large players to the national markets of all he
countries, and which is also significantly slowed down due to the global
economic crisis effect.
“Retailers’ internationalization has brought about the appearance of
multinational, and certainly global regional market structures. The increasing
business internationalization is part of the result of the increase of volume
and increased sophistication of retailing business, though the trend is also a
response to the changing demand and consumer behavior.”6
The significance of the process of development of retailing and trade in
general, and its impact on the overall economy development requires
systematic and continuous monitoring and the analysis of positive and
negative effects. Global economic crisis is only one of the phenomena that
had negative effects, though of different intensity in different countries. It is
also uncertain when the cessation of crisis and trade sector and overall
countries’ economic recovery can be expected. It is for this reason that it is
important to continue monitoring this phenomenon and its influence on the
trade sector as one of the fundamental economic growth drivers.
6
Institute of Economics Sarajevo. (2008): Razvoj trgovine i domaćeg tržišta u FBiH, p. 19.
5. CONCLUSION AND RECOMMENDATIONS
The conducted research unambiguously indicates that the significance of the
role retailing has in creating national economies’ gross domestic product is
continuously increasing. The view that retailing is the most stable sector in
economy is increasingly taking roots. It is proven by the fact that retailing
plays the most significant role with respect to employment in developed
countries, and increasingly in the developing ones as well. It is quite certain
that traditionally based theoretical assumptions are radically changing, due to
the fact that the basis has been formed for the development of leading role of
retailing in marketing channels, and its role of the major driver of country’s
economic power. However, we have been witnessing the current global
economic crisis that has hit the world, which has had significant negative
effects in socioeconomic terms, and the duration of which is uncertain. All
the above described lead to the basic motives which spawned research into
the phenomenon of global crisis influence on the conditions in trade in
general, with a special focus on retailing, and an overview of just a few of the
numerous indicators pointing to the slowdown of the level of this sector
development in the selected SEE countries.
The paper primarily points to the general influence of global recession on the
basic development indicators in order to obtain a comprehensive picture of
the negative effects generated by the crisis and possible disproportions in the
crisis influence in the few selected countries. Results of the analysis
confirmed the fact that the entire countries’ economy, including trade and
retailing in the analyzed countries have been facing problems. This is proven
by the facts that all aspects of the analysis, starting from the GDP levels,
employment, foreign trade, gross value added, and wholesale and retail sales,
employment and the number of stores in these sectors are experiencing a
significant decrease in all the countries used for the analysis, in the period we
believed to be the starting point of the global crisis.
It should be pointed out that the paper primarily focuses on retailing. The
results obtained point to the basic indicators of trade sector position in the
SEE countries due to the effects of current global recession. There is a
number of aspects and a number of methodological solutions the sue of
which would certainly lead to very significant and necessary conclusions,
useful for further directions of theoreticians, researchers, market players, and
certainly creators of country’s economic policy.
The research conducted unambiguously suggests that global economic crisis
has not bypassed SEE countries. The analyzed general economic indicators
register a significant decrease in all the countries; they include GDP, imports,
exports and employment. Trade as a sector that presently registers the most
intensive growth has also been affected by global recession effects.
The share of gross value added achieved in the trade sector in the total
achieved gross value added in 2009 is lower compared to the previous
analyzed years. On the other hand, the relative share of value added created
by trade sector in most less developed transition countries is considerably
higher than that in the countries with higher GDP. This can be a clear
indicator if the insufficient development of manufacturing in these countries.
Employment in the retail and wholesale sectors has been growing constantly
over the past few years. On the other hand, the trade sector is one of the
drivers of the increase in total employment in most analyzed countries.
However, the conducted analysis clearly reveals that total employment in all
the analyzed countries (and generally in all the world countries) registered a
decrease in 2009, due to the global economic recession.
With respect to the achieved sales in trade sector, the analysis revealed that
countries with a higher level of GDP per capita had a higher level of retailing
standard as well, i.e. that they had larger retail sales per capita. It is also quite
clear that global crisis led to a decrease in trade sales in general in all the
analyzed countries. The influence of global crisis in the domain of the
number of stores and service shops is almost least expressed, and the number
of stores and service shops seems to have remained unchanged.
Macroeconomic factors in SEE countries in 2010 reveal that the projected
GDP decrease amounted to 1.6% in Croatia, while Bosnia and Herzegovina
and Serbia had the projected GDP growth of 1% and 1.7% respectively. The
worst seems to be over, though the entire way out of the crisis can be
expected in 2011, with the projected GDP growth in the analyzed countries
amounting to 2%. Without any doubt, the analyzed region has a large unused
potential, particularly in the agriculture sector, the more intensive utilization
of which would have undisputable effects on all the other sectors, particularly
trade (Koprivnjak, 2010, 14-15).
Findings of the paper have implications in three major aspects. The first
aspect is a theoretical one, and points to the need for a continuous approach
to research into retailing and the implications it has on the country’s
economic growth and development, particularly in the conditions of the
current global economic crisis. The second aspect is practical or managerial
one.
When local or foreign traders make business decisions, it is only their
foundation on empirical data, i.e. well-conducted market research that can
ensure good performance and competitiveness of business moves. The third
aspect pertains to economic policy creators, who should support the retailing
aspects and strategies that are immanent to the current global crisis.
Without an insight into the current position, or even lack of some data of
fundamental importance for monitoring and analyzing retailing trends, it can
hardly be achieved.
Euromonitor International estimates that a slowed down recovery of retailing
industry will come to pass after 2010. However, some retailing segments will
still have difficulties, which will be a reflection of the fact that their weakness
are not of a cyclical nature but that reasons are far deeper. It is estimated that
the overall growth of retailing industry in the 2010-2014 period will be more
prominent than it has been over the last five years (Košutić, 2010, 13).
Global crisis certainly requires a global response. A global “new deal’ is
necessary. The world needs global cooperation, regulation and involvement
of all continents. It is necessary to create global coordination and global
reserves (Domljan, 2009, 229).
Although pessimism is a realistic way to observe the current situation and its
short (non)solution, and it is presently very effectively supported by available
statistics, we must not forget the fact that an age of great crises is also an age
of great changes. As it seems things cannot get any worse, a good foundation
has been created for implementing profound reforms.
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Internet:
http://epp.eurostat.ec.europa.eu
http://www.stat.si
http://www.dzs.hr
http://www.hnb.hr
http://www.fzs.ba
http://webrzs.stat.gov.rs
http://www.nbs.rs
http://www.rzs.rs.ba
http://www.bhas.ba