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Households’ Adjustment to the Economic Crisis and the Impact on the Retail Sector in Romania

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  • Irina ION

    () (The Bucharest University of Economic Studies, Romania)

Abstract

This paper aims at a better understanding of how Romanian households’ consumption volumes and trends have changed during the economic crisis and how retailers responded to these changes, a topic under-studied in the Romanian literature despite the fact consumption was the main driver of economic growth previously to the crisis. A qualitative methodology is used, based mainly on secondary data of the Eurostat and the Romanian National Institute of Statistics. Based on this data, we were able to observe that households’ income in real terms has decreased during the crisis in Romania. For the period 2005 – 2012, real earnings have almost stagnated. In 2012, the real annual income represented 100.94% of the incomes of 2005, which indicates an important erosion of the purchasing power of Romanian salaries. Negative evolutions were identified also for the retail sector, as the turnover of retail trade (except motor vehicles and motorcycles) businesses started to decrease in 2007, with a decline more accentuated in 2008, followed by a timid recovery in 2009 and a positive trend in 2012. This adjustments of the households to the effects of the crisis have made retailers to adapt business strategies to the new emerging type of consumer - “the wise consumer”.

Suggested Citation

  • Irina ION, 2014. "Households’ Adjustment to the Economic Crisis and the Impact on the Retail Sector in Romania," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 15(2), pages 174-189, May.
  • Handle: RePEc:rom:rmcimn:v:15:y:2014:i:2:p:174-189
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    References listed on IDEAS

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    1. Messina, Julian & Strozzi, Chiara & Turunen, Jarkko, 2009. "Real wages over the business cycle: OECD evidence from the time and frequency domains," Journal of Economic Dynamics and Control, Elsevier, vol. 33(6), pages 1183-1200, June.
    2. Valeriu Potecea & Georgiana Cebuc, 2010. "Effects Of Economic Crisis On The Romanian Economy," Romanian Economic Business Review, Romanian-American University, vol. 5(2), pages 128-135, June.
    3. Tudor NISTORESCU & Silvia PUIU, 2011. "Considerations Regarding Behavior And Strategic Orientations Of Romanian Retailers During The Economic Crisis," Management and Marketing Journal, University of Craiova, Faculty of Economics and Business Administration, vol. 0(2), pages 183-194, November.
    4. Paul DE BEER, 2012. "Earnings and income inequality in the EU during the crisis," International Labour Review, International Labour Organization, vol. 151(4), pages 313-331, December.
    5. Pop, Napoleon, 2009. "Financial Crisis. Challenges For Romania," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 13(1), pages 89-99, March.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    households; spending; crisis; retail; business strategy.;

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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