Economic downturn and competitiveness on Polish retail market hit small groceries

2010-07-13

About 70% of Polish customers take a positive view of small grocery stores, according to TNS OBOP survey. For 56% of respondents the courteous service at traditional stores is a very important factor. However, the main criterion of customers in terms of choosing a retailer is price, and small groceries are unable to compete with discount chains and large retailers in terms of this.
Therefore, the number of small groceries operating in Poland is gradually shrinking. The closure of small stores reflects the growing competiveness on the retail market, on which discount and supermarket chains are developing rapidly.
Furthermore, since large retail chains have begun to enter small towns in which, so far, the traditional stores have dominated, small grocery stores started vanish from the market.
According to the PMR report Grocery Retail in Poland 2009,the share of small traditional stores as a proportion of total grocery sales in Poland has been falling over the last few years: it dropped to 37% in 2009 from 46.8% in 2005.
Another factor that contributes to the declining number of traditional groceries is the decrease in the rate of growth in demand for FMCG in Poland, which hits mostly small stores. While in 2009 the value of the Polish FMCG market increased by 6.5% year on year, the increase being the second most substantial in Europe, in the first quarter of 2010 spending on food, beverages and household chemicals increased by 4.3% year on year, the weakest result for several years.