Despite the fact that the number of retail outlets in Poland has doubled to almost 450,000 outlets over the last decade, the country is likely to see further spectacular growth in retail sales, predicts a new report from PMR.
The retail market has been boosted by a number of factors over the last few years, not least the rapid growth of the Polish economy. As a result of this, major foreign players such as Tesco and Ahold began to look carefully at the potential in the Polish market, and Poland has in fact attracted the highest number of foreign retail investors in Europe, according to the report.
Of the 20 largest retailers in Europe, 12 are already established in Poland and according to data cited by PMR, over 120 new retailers will seek to enter the Polish market by 2005. The share of foreign retailers in the Polish market, according to GfK Polonia data, soared from 0 per cent as late as 1990 to 50 per cent in 2002, but with large-scale formats (hypermarkets and supermarkets) accounting for only 2 per cent of the total number of food retailing outlets, the potential for further growth is huge.
According to data from the Central Statistical Office (CSO), in 2001 there were over 449,000 shops in Poland. Small shops - those with a sales area of up to 50 square metres, account for 92.4 per cent of all retail outlets, while figures from AC Nielsen, show that there are only four hypermarkets per million inhabitants in Poland compared to 20 in Germany and 13 in the Czech Republic.
According to PMR's Retail Poland 2003" report, the leading retail companies (those with turnover of at least PZ100 million (€26m) in 2002 or a network of 100 outlets) generated total sales of over PZ75 billion last year. The average 2002 sales revenues of the 55 retail chains presented in the report were PZ660 million, while wholesale/cash & carry chains posted average revenues of PZ1.5 billion.
Total retail sales grew by 4.5 per cent between 2000 and 2001 to PZ376.5 billion, driven by a 7.2 per cent increase in food and soft drink sales to PZ12.1 billion. Alcoholic drinks and tobacco accounted for a further PZ38.1 billion, up 2.7 per cent, while non-food sales were PZ217.2 billion, up 3.3 per cent.
The report shows that there are 72,575 retail and wholesale outlets in Poland, of which just 163 are hypermarkets and 1,016 supermarkets. Discount store numbers continue to grow, reaching 1,104 by 2002, while cash & carry outlets account for 228 of the total.
But the telling figures from the report are those which show that hypermarkets already account for the biggest share of sales revenues - 21 per cent - ahead of cash & carry outlets with 20 per cent, grocery stores with 18 per cent and supermarkets with 10.5 per cent.
The report shows that the average hypermarket in Poland generated turnover of PZ100 million in 2002, over 12 times more than the average supermarket and 20 times the revenues of an average discount store, and this high level of turnover means that the hypermarket format is likely to remain one of the most popular choices for the major chains as they continue to expand.
Germany's Metro group is the leading retailer in Poland, with sales of PZ10.5 billion in 2002. A distant second is Portugal's Jeronimo Martins with PZ4.9 billion, followed by Carrefour (PZ3.5 billion), Auchan (PZ3.48 billion) and Casino (PZ3.6 billion), all of which are based in France.
With such rapid growth from the major international players, it was inevitable that consolidation would begin early in the Polish market, and this was certainly the case last year. In July, British chain Tesco bought 15 Hit hypermarkets (including two under construction) from the German company Dohle, while two months later Jeronimo Martins sold five Jumbo hypermarkets to the Dutch company Ahold - itself considered likely to sell off some of its Polish units to pay off its debts.
The top ten retail chains will continue to dominate, the report claims, with forecasts suggesting that they will account for 24 per cent of total FMCG revenues in 2003. Nevertheless, this is still only half that reported in the neighbouring Czech Republic (53 per cent) or Hungary (56 per cent).
With Poland set to join the EU next year, the report predicts that retail developments there will soon be in step with those in western Europe - including a rapid increase in the still underdeveloped areas of direct sales and Internet retailing. Discount stores will also continue to grow in popularity, as in the west, with numbers set to treble over the next few years.
With most of Poland's major urban centres already well supplied with hypermarkets, smaller store formats are expected to show good growth as companies push deeper into the rural areas. This new trend could also offer growth opportunities for expanding Polish retail firms developing their own modern supermarkets, such as Groszek, Stokrotka and Zabka, the report claims.
For details of how to buy PMR's Retail Poland 2003 report, click here.