The retail grocery market in Poland was relatively flat in 2013, registering a growth rate of less than 2%. This should not necessarily be regarded as a poor performance, however, when one considers that the food business is among just a handful of sectors that have not contracted since 2008. So say the authors of Grocery Retail in Poland 2014: Market Analysis and Development Forecasts for 2014-2019.
Following weak growth in the Polish grocery market, which was valued at PLN 234 billion in 2013, the report’s Krakow-based publisher, PMR Ltd., expects the sector to improve in forthcoming years. Correlated with Poland’s GDP outlook, its forecast calls for the market to expand by some 20% over the next half-decade. It is likely that the nation’s economy bottomed out in 2013 and that growth will start a slowly recovery. As a result, the condition of the economy as a whole, including consumer income and spending, should steadily improve, according to PMR.
However, this analysis was made prior to Russia’s announcement on August 6 that it will ban imports of food and agriculture products from the EU and other countries for a period of one year, in retaliation to sanctions imposed on the Moscow government over its Ukraine policy. Poland ranks as the biggest exporter of foodstuffs to Russia, having rung up more than $1.117 billion in sales last year.
PMR believes that growth in the Polish retail market will be driven by the largest chains’ capital spending on new stores, as stronger competition among operators should translate into intensified price-based competition. Additionally, economies of scale ought to enable retail buyers to keep the lid on cost increases from suppliers. At the same time, improving conditions among those budgeting household expenditures should stimulate sales.
Meanwhile, consumers, who learned the lesson of the events following the 2008 economic collapse remain in a particularly frugal frame of mind. Though price is often the key criterion for selecting a store in which to shop, it is not necessarily the price of single items, but rather assurance that the goods purchased for a given amount provide value for money. Biedronka, for example, is not necessarily the cheapest supermarket chain, but its no-frills format has convinced many buyers that it is the lowest-cost operator in Poland.
Compared with findings compiled by PMR in previous years, results of the latest survey (which was conducted among 250 persons interviewed by telephone during June), show that while the proportion of consumers who said they spent more on food dropped, the patterns for choosing both products and places to buy them were modified. Among other findings: 17% of respondents are increasing purchases of private label products; 31% are paying more attention to pricing; impulse buying for non-standard items is being curtailed by 18%.
