The Patchy Digital Landscape of Romanian Food Retail: Regional Disparities and Implications for Market Performance

Abstract

This paper aims to analyse the digital presence of general food retail companies in Romania and investigate whether there is a link between the digital presence and the market performance of these companies. This study is relevant in the context of the digital transformation, that is revolutionizing the retail landscape offering challenges and opportunities alike. For the Romanian food retail sector this is a third major wave of transformation in the last four decades, and these speedy changes generate diverse reactions, with metropolitan areas quickly embracing digital advancements while more peripheral regions face developmental inertia. To offer a better understanding of the context this paper will first review some important studies on the retail landscape and performance of the companies and then will examine the proportion of companies with digital presence on a sample made of the 198 largest companies in general food retail, according to their turnover. With a large sample we aimed to ensure that each county is represented by at least two companies, so we stopped collecting data when this criterion was met. The results highlight a very patchy landscape of digital presence, as in certain regions top companies have developed an multichannel digital presence but in others most companies are invisible in the digital space and are solely rooted in the physical retail activity. The analysis also reveals some challenges of the local food retail companies, that are currently having a large turnover, but who risk losing touch with the consumers, who are increasingly spending time in the digital world. This also places local competitors in a vulnerable position compared to the large multinational retail chains who have taken many steps forward to leverage the digital transformation and secure a long-term competitive advantage. This is a first study on the digitalization of food retail companies in Romania that considers the development differences between the counties and enables a mapping of the regions where more support in terms of digitalization of the retail sector would be needed for local companies to remain in business.