Retailers urged to downsize to tap Polish growth
claims their soaring growth in the last decade will soon start to
slow, forcing companies to adapt their strategies. Chris Mercer
reports.
In the Polish capital Warsaw, France-based food retail giant Carrefour has just built one of the largest hypermarkets in central and eastern Europe, spanning some 18,200 square metres.
It will be the 200th hypermarket owned by a foreign company to have been opened in Poland, most of them in the last 10 years, but it is seen by market analyst group PMR Publications as the peak of the boom, with growth forecast to slow from now on.
"The figure of 200 is often regarded as the saturation level for countries similar in size and population to Poland," says the PMR report, entitled 1994-2004: The decade of the hypermarket comes to an end.
The good news for retailers, though, is that the report still predicts a further 50 new hypermarkets by 2010, despite an overall trend towards smaller, compact stores aimed at Poland's smaller towns, and especially rural areas where 40 per cent of Poles live.
According to PMR, most of the hypermarkets opened in the last two years have been compact stores, usually around 3,000 square metres, and the majority have been opened by German firm Lidl & Schwarz under its Kaufland banner.
"This retail chain has thus managed to outstrip its competitors and become market leader in terms of numbers of hypermarkets owned, with its store count currently standing at 46," says the report, which used data from a larger PMR report, Retail Poland 2004.
But Lidl & Schwarz still lags behind Poland's other big players in terms of hypermarket sales share, sitting in last place with just 3.9 per cent of the market, behind the likes of French companies Carrefour, Auchan, Casino and E. Leclerc as well as German-based Real (part of the Metro Group) and Ahold-owned Hypernova.
However, UK retailer Tesco is the clear winner in this sector, taking more than a fifth of all Polish hypermarket sales, and this company believes it has the strength to cope with any change.
Alex Trenchard, Tesco international corporate affairs manager, said: "The key feature of our businesses is that they are extremely adaptable in terms of format. We have already done compact stores in Slovakia and have started in Poland."
He said that Tesco was planning to open two new compact stores in south west Poland by the end of the year, one Opole and another in Katowice.
"We are not necessarily saying that is where the market is going in the next few years," said Trenchard, who was not wholly convinced by the PMR report's claims. "I would not say that the hypermarket era is coming to an end. We will continue to roll out different sizes and the most important thing is to use diversity."
