Supermarkets in Poland - December 2005

Supermarkets in Poland - 2006 provides a comprehensive overview of developments and trends in the Polish supermarket industry during the period 2001 to 2005. The objective of the report is to highlight the patterns of investment observed to date with a view to showing that the industry, as a whole, is still fragmented and that current trends strongly suggest that a further wave of supermarket investments can be expected during the course of the next five years.

In 2004, total retail sales in Poland reached £66.1 billion representing a growth of 7.5% on 2003. When measured in terms of Polish zlotys retail sales show positive year-on-year growth from 2002, suggesting that the predicted negative impact of the world recession on retailer operations in the country was not entirely supported.

The Polish supermarket industry, serving a population of 38 million consumers, has expanded considerably over the past five years and has developed in a country with a dualistic economic structure. Central to growth within the industry has been the rapid emergence of foreign retail outlets which, as of yet, do not account for the lion’s share of the market but have signalled their intentions to invest greater amounts with a view to consolidating their future positions. These developments have further defined and strengthened the Polish retail growth track through further foreign direct investment into the sector, which in turn has had a positive impact on the stimulation of domestic and foreign trade in both food and non-food goods.

Foreign retailers such as Tesco, Ahold, Geant and Carrefour, who already play dominant roles through Europe and internationally are planning to expand on their current investments in the region, and Poland features highly on the agenda. However, the concentration and increasing market share of larger retailers has not automatically resulted in the subsequent closure of as many small retail outlets as would possibly be expected. Much of this is due to the demographic structure of the country, and the fact that more than 40% of the population lives in small rural towns. The potential for more modern formats as well as distribution channels beyond urban areas has yet to be explored and developed.

The advantages associated with the larger modern outlet do not provide, on their own, a clear win strategy, since modern discount stores that offer significantly lower prices are the key to Polish consumers’ money and have proven to be the most popular form of outlet. The leading position in the retail market will ultimately be decided by the speed of investment, scale of expansion, the all-important price factor and adaptation of retail outlets to the populations of Poland’s less saturated rural economies.