The Polish retail sector maintained overall positive performance in 2013, propped by the expansion of the leading chains across the country and stable demand for basic grocery products. Nonetheless, the sector has not remained resilient to the economic uncertainty, as consumers’ lack of confidence reflected in cautious purchase behaviour, mostly oriented towards cheaper brands and private label products. Under such circumstances, discounters and e-commerce continued to gain grounds.

The grocery sector increased by approximately 3% y/y in value terms in 2013, yet the situation varied widely across the market segments. Discounters thrived, as their price policies and development of private label brands continued to attract customers, while aggressive chain expansion also contributed to overall y/y growth of sales. On the other hand, hypermarkets faced sales slump.

The clothing and footwear segment increased marginally y/y in 2013, mostly reflecting the enlargement of retail chains. Nonetheless, after the decline recorded in 2012, the market demand for apparel and footwear recovered in 2013 and is expected to slowly pick up in the coming years, alongside the expected improvement of the country’s economy.

The sales of consumer electronics maintained positive performance y/y in value terms in 2013, but the increase was only marginal as demand remained subdued in the segments with the highest share of the market. The sales of household appliances maintained y/y increase, the IT segment remained roughly stable, while sales of TV sets were on decline.

The cosmetics segment advanced moderately y/y in 2013 and is expected to grow at similar pace in the coming years. The market is stable and mature, yet there is still enough room for growth. For instance, the sales in discount stores are growing at double-digit y/y pace, as the chains adapted their offer to the customer demand and broadened their product assortment accordingly.

The DIY market declined by approximately 7.9% y/y in 2013, affected by the consumers’ cutting down of expenditures, yet many DIY players (such as PSB Mrowka, Leroy Merlin, Jula and Obi) continued to expand and have further plans for enlarging their networks.

The retail market will likely maintain on upward path in 2014 as well, paralleling the country’s projected improving macroeconomic environment. Our QuERI database reports show that consumer real market demand inched up by 2.4% y/y in 2013, recovering after the 3.6% y/y decline in 2012, and is forecasted to continue rising in the coming years. In addition to this, the growth of the market in value terms will be largely supported by the retail chains’ expansion, considering the modern retail space deliveries expected this year.

Key Points:

Retail sector maintains positive performance in 2013, prospects for 2014 remain optimistic
Total retail sales index up 1.6% y/y in 2013, growth accelerates in Jan-Feb 2014
Shopping centre deliveries to keep up momentum in 2014
Retail sector expected to face further consolidation this year