Poland Retail Report Q3 2012

The Polish Retail Report examines the long-term potential of the local consumer market, but flags shortterm concerns about the impact on Poland’s economic outlook of the austere 2012 public budget passed by Prime Minister Donald Tusk, which will drag on domestic demand and consumer spending.

The report examines how best to maximise returns in the Polish retail market while minimising investment risk, and also explores the impact of the negative effects of the eurozone crisis, together with domestic austerity, on the Polish consumer and on the ability of producers and exporters to realise returns in the short term.

The report also analyses the growth and risk management strategies being employed by the leading players in the Polish retail sector, as they seek to maximise the growth opportunities offered by the local market.

Polish per capita consumer spending is forecast to increase by 61% to 2016, compared with a regional growth average of 59%. The country comes sixth (out of 10) in BMI’s Central and Eastern Europe (CEE)

Retail Risk/Reward Ratings, and outperforms slightly for Risk. The Polish retail market has achieved strong growth as disposable incomes rise, consumers seek the choice and low prices offered by foreign and domestic chains, and car ownership increases. The market is expected to continue expanding steadily as it reaps the benefits of EU membership gained in 2004 and increasing amounts of FDI. These trends are forecast to lead to the value of the retail segment increasing by almost 25% in local currency terms between 2012 and 2016, growing from a predicted PLN441.13bn (US$183.10bn) to PLN550.98bn (US$228.69bn).

Among all retail categories, Mass Grocery Retail (MGR) will be the outperformer through to 2016 in growth terms, with sales expected to grow by 52% throughout the forecast period, reaching US$47.11bn by 2016. BMI forecasts hypermarkets to outperform the rest of the MGR sector, with sales expected to rise by almost 79% over the forecast period. Poland is one of the key MGR markets in the CEE region: with disposable incomes rising, more Polish consumers are converting to modern retail formats.

In the competitive arena, BMI sees continuing upside potential from the senate vote in 2007 against a law that would have imposed construction restrictions on hypermarkets. The ruling has paved the way for Poland’s major operators to continue unfettered with their expansion plans.