Page 80 - SE Outlook Regions 2023

3.0 Real economy outlook

3.1 Real economy - Albania

3.1.1 Retail

The volume of retail sales increased by 6.1% year on year in the
second quarter of 2022, while sales were up by a seasonally adjusted
0.5% compared to the previous quarter.

The steepest increase was for non-food sales, which rose by 7.5% y/y,
contributing +3.1 percentage points (pp) to the overall increase.
Meanwhile, sales of food, beverages and tobacco were up by 4.8% y/y
and motor fuel retail sales by 5.2%.

Quarter on quarter, food, beverages and tobacco sales were up by
0.9% and motor fuel retail sales by 1.2%, while non-food sales dropped
by 0.4%.

Albania still has a large number of small private shops, while
international retail chains are expanding in the country.

In the food retail sector, the Spar and Conad chains have grown their
networks of supermarkets in recent years. A European Bank for
Reconstruction and Development (EBRD) loan announced in 2022 for
German retail chain Schwarz Group is intended to support the
expansion of Lidl stores in Albania and other Western Balkan countries.

Fashion giant Inditex, owner of brands such as Zara, Massimo Dutti,
Bershka, Pull&Bear and Stradivarius, arrived in Albania in 2014. H&M is
expected to open its first Albanian store in 2023. However,
Klounikas-Lappas, which operates the Mothercare brand in Greece,
said in November that it plans to close its outlet in Albania at the
beginning of 2023, citing poor sales post-pandemic and “fragile”
economic conditions.

As Albania’s retail sector develops, a growing number of malls have
opened. Despite the economic slowdown, Balkan Finance Investment
Group (Balfin) announced the expansion of TEG, already the biggest
shopping centre in Albania, and the opening of the West Park mall in
Korca.

Online retail is still at a relatively early stage in Albania, even compared
to other Central and Southeast European countries. However, the
segment is growing. Among the Albanian e-commerce companies is
Aladini.al, which in 2022 opened its first bricks and mortar
Omni-Channel store.

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