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Trade

Distributive trade has an important place in the overall economy of the Republic of Croatia. Some 38% of Croatian business entities are engaged in distributive trade. They accounted for approximately 15% of Croatian total employment and 10.2% of GDP in 2003.

Total turnover in distributive trade amounted to HRK 154.5 bn in the first nine months of 2004. Of this amount, companies generated a turnover of HRK 145.2 bn (VAT included), which is 1.5% more than a year before, and craft businesses (a separate category of small business in Croatia) generated HRK 9.3 bn, or 0.5% more on the year. As the growth of turnover in the first nine months of 2004 was modest, estimates are that, despite the holiday purchasing boom in December, the year 2004 was not particularly successful for the trade sector, i.e. total sales growth will probably be 4-5%.

Another breakdown of distributive trade in the period January-September 2004 shows that its largest portion is accounted for by wholesale trade and intermediation (48%), followed by retail trade (29.4%), retail trade in motor vehicles/motorcycles and in fuels/lubricants (11.7%), while non-mercantile activities’ share of total turnover was 10.9%.

The Croatian retail network is still fragmented, which is reflected in the total number of small stores (less than 100 sq m). In the first nine months of 2004 there were 45,010 stores, of which 23,017 were owned/rented by companies and 21,993 by so-called trading craft businesses.

Distributive trade in Croatia has recently been marked by the booming construction of large stores, hypermarkets, supermarkets, shopping centres, specialised shops and large distribution centres that have tailored their programmes primarily to small and medium-sized trading companies, trading craft businesses and the catering sector.

The highest concentration of newly-built retail establishments is in Zagreb and Zagreb County. Classified by newly built retail area, this region is followed by Primorje-Gorski kotar, Osijek-Baranja and Split-Dalmatia Counties. Estimates for the Croatian retail sector are that in the period 1998-2004 more than 500,000 sq m were built in facilities larger than 1,000 sq m. More than 50% of newly-built retail area are concentrated in Zagreb and Zagreb County.

Unconventional types of commerce, non-store sale (Internet, catalogue, direct sale, etc.) are gaining ground in the Croatian market.

The basic strategic principles for the development of Croatian distributive trade are: development of partnership relations with domestic manufacturing industries, consolidation of companies, even distribution of retail establishments and distribution centres across all counties, development of own brands, diversification of services, development of electronic trade and penetration of international markets. In line with European and international practices in distributive trade, which are focused on customer needs, the Croatian distributive trade sector is gradually building a modern trade network that can be on a par with its competition in terms of product range, prices, services and the quality of goods. To this aim, improvements to legislation are being made to contribute to the development of the trade sector and to consumer protection, and to ensure fair competition.