The retail sector in Croatia is certainly out of the recession and according to the latest results making great strides that are being felt by Croatian retailers and consumers. Analyzing the index of turnover growth for Croatian commercial centers, including Shopping Center, Retail Parks and Hybrid Projects, we achieved encouraging results in all four quarters of 2016. The largest average increase was recorded in the 4th quarter, with 8.63% higher turnover compared to 2015. Significant growth was also recorded in the 1st quarter (8.37%), while the 2nd and 3rd quarters were slower, but still with increases and on average in positive territory.
Comparing the type of retail properties, Shopping Center recorded an annual increase of about 4%, while Retail Parks and Hybrid Projects achieved even greater growth, an average of nearly 6% higher than in 2015.
The all-important retail category also recorded positive annual results. Among the most notable areas was the gastronomy sector, which achieved an annual growth of more than 10% compared to 2015. Stable and significant growth was also recorded in the fashion sector, where the most notable increase was in the apparel category with an increase of 6% compared to 2015. As expected, the 2nd quarter results in the footwear and accessories branch slowed, recording a small decline in turnover but the shortfall was quickly made up based on the extremely positive results at the end of 2016.
The positive turnover increases are a reflection of the growth of general economic indicators in 2016, when annualized 3rd quarter GDP growth amounted to 2.9%, more than the European Union average. Significant growth in private consumption, which is the result of income tax reductions and deflation, continued. According to some economic analysts, low energy prices and the consequent deflation had a favorable effect on the discretionary income of households and encouraged strong growth in private consumption, which is directly reflected in the retail sector.
Steady economic growth, a record tourist season and the first decline in the public debt in many years were the main positive developments of the Croatian economy in 2016, despite the political instability of the first half of the year 2016.