Polish Retail Sector Report

Published by: Internet Securities, Inc. (Intellinews)

Published: Sep. 15, 2009 - 23 Pages

Table of Contents

Expectations of bad performance of private consumption have not come true. According to the most recent data, retail sales rose 6.9% in monthly terms in July (the fastest growth this year), and by 5.7 % y/y. Consumer sentiment indicators are rising rapidly after months of steady declines.
However, risk still remains. The unemployment rate rose for the first time in four months in July, to 10.8% from 10.7% in June and 9.4% in July of last year. Companies are expected to continue layoffs, which will negatively influence private consumption and retail sales in the coming months. Overall, this year should be difficult for retail chains. The research firm PMR expects that retail sales will grow by only 3-5% in 2009.
The crisis is causing significant changes on the Polish retail market, where once dominant foreign-owned hypermarkets are being beaten by the rapidly growing discount chains. This trend is going to strengthen even further and growing competition will ultimately make some foreign chains withdraw from Poland. According to Ryszard Tomaszewski, head of Tesco Polska, 3-4 hypermarket chains out of the currently operating 10 will have to disappear from the market.
Another trend that may occur is diversification. The most recent purchase of Billa by the French E.Leclerc is a good example.

Abstract

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