]>Both foreign and local retail chains are leveraging opportunities in Croatia. After years of economic stagnation, Croatia is a market showing every sign of significant improvement. In 1999, according to analyst Euromonitor International, retail sales in Croatia were 28,694 million Kuna (U.S. $5,000 million). By 2003, this had very nearly doubled to 51,712 million Kuna (U.S. $9,000 million). And in 2005, "for the first time in many years, exports grew at a higher rate than imports," according to Travis Rutherford, MGM's executive vice president of consumer products and location-based entertainment. Rutherford notes that "economic growth slowed considerably, but both inflation, at 2.5 percent, and unemployment, at 18 percent, remain steady, and the government is predicting an annual GDP growth of around 4 percent." That the country's prospects are looking good is evidenced by the recent, and ongoing, interest shown by what Euromonitor research analyst Raphael Moreau describes as "an explosive investment race by many foreign chains." Moreau ties the start of this phenomenon to "the entry, in 2001, of Germany cash-and-carry chain Metro." By the end of 2005, Metro was operating five stores in Croatia, and reporting a 9.2 percent rise in profits to HRK 1.66 billion (U.S. $290 million). Spar entered the market in June 2005, and both Lidl and Leclerc are planning to enter the Croatian market in 2006, with the French retailer aiming for 10 stores by year-end.
However,
MGM's Rutherford says local chains are fighting back, as evidenced both by the merger in March 2005 of NTL, Croatia's second-largest chain, with CBA, its fifth largest, and by MGM's selection of Turbo Limac, the country's largest toy retailer, under the brand Magma, as its local partner for
Pink Panther
merchandise. Additionally, says Euromonitor's Moreau, "many of the larger domestic retailers have launched their own modern convenience stores, and some, including Konzum and Getro, have started selling private-label goods in order to lower prices."Despite all the positive news, Rutherford believes "it will take some time to change the consumer purchasing patterns and gain significant lift in category-specific market share." Currently, he reports, "the biggest selling product groups in licensed merchandise are toys and stationery," adding, "apparel, publishing, footwear, food, and confectionery are all relatively small, and currently there are no examples of licensed properties being used in promotions, although our partner, Magma, sees these categories as representing big opportunities."Some of the best-selling licensed properties as far as TV and film are concerned include, per Rutherford,
Teenage Mutant Ninja Turtles, Action Man, Spider-Man, Star Wars,
Disney, Strawberry Shortcake, and Care Bears. For the 'tween/teen and adult market, Rutherford cites
Pink Panther,
Snoopy, Disney,
Looney Tunes,
and Garfield.
