1、75rivalry of domestic and foreign retailers in croatiadario dunkovi*received: 6. 7. 2004. preliminary communicationaccepted: 14. 09. 2004. udc: 339.37 (497.5)foreign retailers are gaining progressively more of the croatian retail market share. this paper is an analysis of the retail structure in the

2、 republic of croatia (sector g 52), with respect to the origin of trading companies (domestic and foreign retailers), to their size (small, medium and large companies) and to sub-sectors within a sector g 52. the aim of this paper is to contribute to the understanding of causes underlying the foreig

3、n retailers expansion regarding their business success. the paper includes an analysis of the structure of household consumption in the republic of croatia as an important condition for the development of the retail structure. the analysis involves the indicators of domestic and foreign retailers bu

4、siness success: the turnover per one trading company and the turnover per one employee of the trading company. the comparison of these indicators for domestic and foreign retailers lead to certain differences (foreign retailers are slightly more productive than the domestic retailers) and to the eva

5、luation of the differences caused by the size of the company. since a correlation of the size of the structure of domestic and foreign trading companies in certain sub-sectors within sector g 52 must not exist, the conclusion suggests itself in the form of a need to investigate other features of the

6、 retail structure. the research is related to the year 2001. nevertheless, the research presented in the paper points at an inadequate adaptability of domestic retailers to the structure of demand in the republic of croatia as the cause of the insufficient trading success._* dario dunkovi, m.sc., ph

7、.d. candidate at the faculty of economics in osijek, g. ninskog 25, 31221 josipovac, osijek. phone: +385 (0)91 28 000 24, +385 (0)31 35 35 36, e-mail: dunkovicgeli.hr.management, vol. 9, 2004, 2, pp. 75-96d. dunkovi: rivalry of domestic and foreign retailers in croatia761. introductionin the croatia

8、n retail market, the increasing number of foreign retailers that glut the domestic market in the form of retail chains is evident. hence, domestic retailers are faced with a reduced market share. trading activities are important for the croatian economy1, therefore, the research into its structure c

9、ould present a significant contribution to domestic development. hereby, the research is directed towards one of the trading sectors the retail sector.in the paper, there is a comparison of available structural and financial data of domestic and foreign retailers in the domestic market. the aim is t

10、o find reasons why foreign retailers are slightly more successful than the domestic retailers in their home market. moreover, the paper is based on the assumption that foreign retailers have a better market performance. this was also implied by their different inclusion structure into sub-sectors g

11、- 52.1-62 and turnover per employee. the appeal of a retail structure depends on its harmonization with the structure of consumer needs. therefore, the structure of personal household consumption is investigated first, i.e. the demand trends in the retail sector in croatia. the research includes all

12、 companies active in the retail sector in croatia, i.e. group g - 52.1-6, which submitted their annual financial report by december 31, 2001 to the financial service agency (fina). the retail sector involves economic activities g - 52.1-63, which can be performed only by business entities (trading c

13、ompanies or tradesmen) registered at a commercial court. there is a distinction in croatian retail terminology between bodies which are primarily registered to perform trade activities according to nace g 52, and bodies (retailers) which, regardless of their economic activity registration, can perfo

14、rm retailing activities. in both cases, the ultimate goal is to sell products or services to final consumers. the data are grouped into two statistical sets; one of which includes the data obtained from domestic trading companies registered for activities in the retail sector, the other includes dat

15、a from foreign trading companies in croatia. the division emerged from the need to compare some elements of their retail structure. the comparative analysis includes data from sector g 52, such as the number of trading companies, _1 statistical yearbook of croatia 2003. table 11-4, trading accounted

16、 for 8.9% of gross value added in gdp in 2001, whereas it took the second position by its share in the added value of gdp, the largest share of 17.6% was taken up by the processing industry.2 nace classification, statistical yearbook of croatia 2003.3 sub-sector g - 52.7 also includes retail busines

17、s in a wider sense.management, vol. 9, 2004, 2, pp. 75-96d. dunkovi: rivalry of domestic and foreign retailers in croatia77trading branch activities, number of employees, and total and average turnover. the data are collected from several official sources and categorized in crossed tables. the metho

18、dology is also related to the use of the graphic presentation methods. economic trading activities differ with respect to the type of merchandise and selling location, and it can be said that they are different, among other things, with respect to the trading branches4. table 1. classification of ec

19、onomic activities in retail sectornace codedescription / economic activities / sub sectorsg - 52retail sectorg - 52.1non-specialized stores with food, beverages or tobacco predominating; and other storesg - 52.2specialized stores with food, beverages and tobaccog - 52.3pharmaceutical, cosmetic, toil

20、etry and similar articlesg - 52.4specialized stores with textiles, clothing, footwear, household articles, appliances, hardware, and other specialized storesg - 52.5sale of used goods in specialized storesg - 52.6retail sale not in storessource: statistical yearbook of croatia 2002.ani 2002 showed t

21、hat the retailing sector is marked by dynamic changes in the retail structure. he used the statistical method of correlation in order to correlate some variables of the economic environment important for retail examination. the result pointed at a strong correlation between gdp, income, personal con

22、sumption and retail turnover5. the statistical correlation method in retail research can be used to examine the relationship between the two sets of static variables across sectors or other different structures dinlersoz, 19996. this approach is used for the analysis of retail structure elements.2.

23、structure of personal consumption in croatia and eupersonal consumption per household in croatia relies mostly on consumption in retail, which is caused by a lower standard when croatia is compared with eu states and also with some countries in transition. the actual turnover of the retail sector in

24、 croatia, in the period between 1998 and 2003, is _4 according to segetlija 1999, a trading branch is to be understood as a set of goods that are the same or similar with respect to their components, production, features or purposes.5 see ani, 2002, table 10, p. 893, analysis of value changes betwee

25、n 1994 and 2000.6 dinlersoz 1999 based his research on this methodology.management, vol. 9, 2004, 2, pp. 75-96d. dunkovi: rivalry of domestic and foreign retailers in croatia78marked by oscillations7. however, the actual turnover in 2003 was 18.9% higher than in 2000.table 2. personal consumption pe

26、r household in croatia 19982002consumption in household (in hrk)structure of consumptioncategory / year199819992000200120021998(%)1999(%)2000(%)2001(%)2002(%)personal consumption53.67752.38258.61361.14164.736100100100100100food and non-alcoholic beverages20.48519.82618.84520.58520.81639.137.832.233.

27、732.2alcoholic beverages and tobacco2.4732.3912.2732.4862.574.14.0clothing, cosmetics, jewelry, footwear3.3673.9115.9075.5855.7356.47.5furnishing, household equipment3.3873.0812.8803.4503.575.65.5total retail sector29.71229.24529.90532.10632.69956.755.851.152.450.6housi

28、ng and energy consumption5.8006.9587.8118.1878.87511.113.313.313.413.7health services8989571.2281.2321.442.02.2transport7.2045.7527.1567.0287.16713.811.012.211.511.1communication1.0081.1131.6192.1273.13.54.8recreation and culture2.7582.9943.9313.5764.155.86.4education3

29、30368431505430.80.7hotel and restaurant services1.6351.4292.1551.8212.043.03.2misc. goods and services4.3323.6024.3774.5594.797.57.4index 1999=100102100112117123chain index-97111104105source: authors calculation of data given in table 10.4 of the statistical yearbook of

30、croatia 1999; 2003._7 turnover indices expressed in actual prices oscillated, according to the statistical yearbook of croatia 1999, 2002 and 2003 (data available since 1998).management, vol. 9, 2004, 2, pp. 75-96d. dunkovi: rivalry of domestic and foreign retailers in croatia79changes in the struct

31、ure of personal consumption per household, i.e. the consumption of income available, are of vital importance for turnover and retail development. according to ani 2002, the personal consumption structure determines the structure of retail turnover according to trading branches. a relative increase i

32、n personal consumption in a certain category informs retailers about the growing market potential of a certain branch. household consumption is a retail demand; therefore, in order for a certain retail structure to be appealing to consumers, it must reflect a specific structure of household market d

33、emand. if the retail structure in croatia was to be viewed as the retail structure of domestic and of foreign retailers, the more successful of the two would be the one more appealing to the final consumers.the structure and changes in personal consumption per household in croatia (according to cate

34、gories) are shown in table 2. it can be seen that the most significant is the decrease in the share of food and non-alcoholic beverage consumption, whereas the most significant increase is achieved in the communication category. only the consumption of clothing and footwear from the retail categorie

35、s shows a relative increase, whereas a reduction is noted only in the categories of other types of consumption, i.e. in household consumption for transport and miscellaneous goods and services. figure 1 shows that households in croatia primarily spend their income on satisfying their existential nee

36、ds, and, once this is achieved, only then are other needs satisfied.20253035199819992000200120022003*in 000 knretail categoriesother categoriesfigure 1. structure of personal consumption per household in croatia 19982002 and projection for 20038source: cbs newsletters 13.2.1., 9.1.1. and 13.1.2. in

37、2003._8 * denotes authors estimation.management, vol. 9, 2004, 2, pp. 75-96d. dunkovi: rivalry of domestic and foreign retailers in croatia80051015202530austriaczechrep.ireland slovenia croatiain 000 eurretailcategoriesothercategoriesfigure 2. comparison of structures of personal consumption per hou

38、sehold in some european countries in 2002source: authors calculation of personal consumption per household from the statistical yearbooks of: ireland 2003; austria 2003; czech republic 2003; slovenia 2003 and croatia 2003.in eu countries in 2001, the ratio from figure 1 was, on average, 36%/64% in f

39、avor of other types of consumption9. the structure of personal consumption, with regard to the consumption share in retail, differs between eu states as well as between transition countries (figure 2). the structure in croatia in 2002 was still disproportional to the structure of eu states, but also

40、 to some applicant countries in 2004. the czech republic has a lower total value of personal consumption per household and a significantly lower relative value of personal consumption in retailing when compared to croatia. among eu-15 member states, the structure in austria shows the sharpest deviat

41、ion in these shares, whereas the circumstances in ireland and slovenia are representative of the average in the eu10._9 authors thorough examination of data from the on-line published statistical yearbooks of all eu countries in 2003.10 authors thorough examination of data from the on-line published

42、 statistical yearbooks of eu countries in 2003.management, vol. 9, 2004, 2, pp. 75-96d. dunkovi: rivalry of domestic and foreign retailers in croatia81if disposable income, as an independent variable, and personal consumption in the retail sector, as a dependent variable, are put into correlation, t

43、he result will show the impact of a disposable income fluctuation on the fluctuations in personal consumption in the retail sector. pearson correlation coefficient r can be used in order to compare the interdependence of the two sets of variables:2222yynxxnyxyxnrwhere x is the independent and y the

44、dependant variable, with n representing the number of frequencies11. table 3. relation of disposable income and personal consumption in the retail sector in croatia from 1998-2002function / variablesxynr (pear. coef.)pearson correlation coefficientdisposable income per householdpersonal consumption

45、- total retail sector50.87source: table 2; disposable income per household named in table 10-2 of the statistical yearbook of croatia 1999; 2002; 2003.the value of coefficient r 0.87 shows that these sets are strongly, but not entirely, correlated. it can be concluded that an increase in the dispens

46、able income per household in croatia significantly affects the level of household consumption in the retail sector. _11 petz 1985, p 185. it is one of several forms of formulas that can be used for the pearson correlation coefficient, the same is given by ms excel, category of statistical functions:

47、 pearson (array1 ,array2). it measures the strength of the linear relationship between two sets of variables, one independent, and the other dependant. it can range from -1 (negative correlation) to 1 (complete correlation, where 0 means no correlation). if the coefficient is in the range of +0.8 to

48、 1, the variables are strongly correlated, if it is between +0.4 and +0.8, they are significantly correlated, and if r is in the range between +0.2 and +0.4, there is a weak positive correlation between variables. a negative sign for r has identical meaning, but then we speak about negative dependen

49、ce, i.e. correlation. (http:/www.hyperdictionary/dictionary/correlation) (2.1.2004)management, vol. 9, 2004, 2, pp. 75-96d. dunkovi: rivalry of domestic and foreign retailers in croatia8220304050607019992000200120022003*in 000 hrkdisposable income50% of disposable incomepersonal consumption in retai

50、lfigure 3. absolute change of disposable income and personal consumption per household in croatia from 1999-200312source: table 2; the statistical yearbook of croatia 1999; 2002; 2003; table 10.2; cbs newsletters 13.2.1, 9.1.1 and 13.1.2 in 2003.an increase in disposable income in households will be

51、 better registered by retailers of services and goods outside the retail sector. this is the consequence of the absolute growth of disposable income compared to the absolute growth of household consumption in the retail sector, which is also shown by the steeper curve incline in figure 3. the change

52、s also occur in the structure of personal consumption in retail, which is an important factor for the shaping of the domestic retail structure.3. retail sector structure and comparison offinancial results in the croatian retail tradethe research into the elements of the retail structure could also c

53、ontribute to determining the causes of a better success of foreign retailers in domestic markets. mason/mayer 1999 state that the type of ownership over business entities, according to descriptive categorization, is one of the elements of the retail structure. also, they find the turnover to be an e

54、lement to be taken into consideration. furthermore, the elements can be the size of a business entity, involvement in nace sub-sectors, etc. the confrontation of structural features includes data from 2001: (1) the number of trading companies in the retail sector; (2) the inclusion of those into the

55、 sub-sectors of g 52 and (3) the number of employees in a company._12 * denotes authors estimation on the basis of the examination of changes in relevant statistical indices in 2003.management, vol. 9, 2004, 2, pp. 75-96d. dunkovi: rivalry of domestic and foreign retailers in croatia83the data are c

56、ategorized according to the ownership origin (domestic and foreign)13 and the size of a business entity. business entities in croatia are, by law14, categorized according to their size (small15, medium16 and large17); therefore, this division is relevant for future research. the purpose of dividing

57、retailers into two statistical sets accounts for a separate observation of the sets features and a correlation among variables.the analysis of the financial results includes the analysis of the turnover of trading companies in g 52 in 2001. the goal of the comparison of results between domestic and

58、foreign retailers in croatia is to determine the total and average turnover of trading companies, as well as the employee turnover achieved.the research of some structural features and financial results includes data on domestic and foreign trading companies in croatia, mainly registered for economi

59、c activities in the retail sector. the statistical set includes all 6,262 trading companies that submitted their annual financial report by december 31, 2001 to the financial service agency18. that is the actual number of trading companies that, in 2001, regularly performed economic activities and p

60、aid taxes.4. structure of enterprises in the retail sectorthe structure of the retail sector presented in table 4 shows that foreign retail companies in 2001 made 4.8% of the total number of active trading _13 for the purpose of this research, domestic trading companies are considered as such if the