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Growth Continuing Despite Challenges

Unlike many European countriesm where we saw images of empty shelves and shortages of products even at the start of the pandemic, the supply of the Serbian population has been continuous, orderly and timely, with price stability preserved

In contrast to numerous past economic crises during which the biggest challenge was to stimulate demand, the current pandemic has primarily brought problems on the supply side, because the burning issue is to maintain production under conditions of the limited movement of people.

In that sense, the greatest threat to the retail sector, especially since the outbreak of the pandemic, was reflected in the danger of whether, and at what prices, retailers would be able to procure goods, given the huge shocks to global supply chains, and sell to consumers with limited movements due to health reasons.

Despite all the challenges, Serbia’s retail sector has provided the population with continuous, orderly and timely supplies throughout the pandemic, alongside the preserving of price stability. Unlike many European countries, where we saw images of empty shelves and shortages of product even at the start of the pandemic, in Serbia there has been a wide range of goods on offer the whole time, especially consumer goods.

Despite the great growth of online orders to retail chains, less than one per cent of total sales of consumer goods on the market are realised electronically. However, large retailers that sell clothing or appliances realise around 20 per cent of their sales revenue through online orders

I must emphasise that state support measures for the entire economy, thanks to which production and employment were maintained, also contributed greatly to the stability of the retail market. Moreover, the turnover of retail trade increased by 4.3% in 2020, and a growth trend of three per cent compared to the same period of last year continued in the first two months of this year. Additionally, with 348,000 employees in the wholesale and retail trade sectors in 2020, levels of employment were preserved in this sector, which accounts for around 15 per cent of the total number of employees.

Trade is certainly among the sectors not to be hit as hard by the crisis, a large contribution to which was provided by shifting the focus from traditional channels to E-commerce, as a response to the limited operations of physical retail outlets. New trends will certainly also change consumer habits in the long run, while online sales are expected to continue growing. The number of e-transactions realised doubled last year, to 14 million, as did the value of e-transactions, which increased from 17 billion dinars in 2019 to 32 billion dinars last year.

There were individual problems with online deliveries at the start of the crisis, due to the increased volume of work, but the delivery process stabilised quickly. However, with the expansion of E-commerce we have seen that retailers’ competitiveness will depend to a great extent on the logistics of delivery, which is very demanding both financially and organisationally.

There will certainly be a lot of challenges in the period ahead that will impact on the speed of the recovery of the entire economy, and thus also on trends in the retail sector. We should particularly keep in mind the present uncertainty regarding the shifting world oil price, which is on the rise, and the rising price of food globally, which is also caused by increased demand due to the pandemic. The Government of Serbia will monitor the situation on the market and, if the need arises, react in a timely manner, within the scope of its legal competencies, with the aim of ensuring the orderly supplying of the market and the maintaining of price stability.