Poland Retail Report - 2013

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Poland Retail Report - 2013

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

Table of Contents

Contents
Executive summary 5
Market overview 6
Retail sector maintains positive performance in 2013, prospects for 2014 remain optimistic 6
Total retail sales index up 1.6% y/y in 2013, growth accelerates in Jan-Feb 2014 8
Shopping centre deliveries to keep up momentum in 2014 9
Retail sector expected to face further consolidation this year 9
E-commerce market continues growing at double-digit annual pace 10
Hypermarkets, supermarkets, discount stores 11
Grocery market value inches up 3% y/y in 2013 11
Most discounters plan further expansion, overall network to hit 4,000 units in 2014 11
Retail chains operate 166 petrol stations at end-2013 12
Biedronka to open 300 units in 2014, tests new store formats 13
Jeronimo Martins to buy 11 MarcPol stores 13
Netto plans 50 openings in 2014, analyses new store formats 13
Zabka takes over five chains in 2013, plans to expand by 600 units in 2014 13
Carrefour moves on with investments in store upgrades, retail development, Express chain expansion 14
Clothing and footwear stores 14
Clothing, footwear sales increase marginally y/y in value terms in 2013 14
Online clothing shops keep gaining popularity, while domestic retailers further expand abroad 15
Major clothing, footwear companies report improving sales results in 2013, Q1/2014 16
CCC to spend EUR 24mn per year in 2014-2015 to double its retail space 16
Vistula to focus on retail business, plans 18 new stores this year 17
LPP to expand in Germany, Croatia, earmarks PLN 450mn for retail network enlargement in 2014 18
Wojas to approach new markets in 2014 18
Consumer electronics stores 19
Consumer electronics sales increase marginally y/y in 2013, as demand remains subdued 19
E-commerce share in consumer electronics sales to keep gaining grounds 20
Major consumer electronics chains continue dynamic expansion in 2013, independent retailers struggle 20
Saturn to open two stores in H1/2014 20
NeoNet moves on with chain expansion, plans 120 openings in 2014 21
Avans continues expansion by new openings 21
Mix Electronics announces systemic bankruptcy 21
RTV Euro AGD maintains accelerated expansion pace 21
Pharmaceuticals, cosmetics stores 22
Pharmaceutical retail sales rise 4.6% y/y in 2013 22
Large pharmacy chains continue gaining market share, while number of independent players is on decline 22
Cosmetics market value up y/y in 2013, prospects remain optimistic 22
Cosmetics chains continue expanding, eating into smaller retailers’ market share 22
Rossman moves on with network enlargement 23
Hygienika acquires remaining 50% stake in cosmetics retailer Dayli Polska 23
Natura drugstore chain rumoured to be put for sale 23
Construction materials, DIY and furniture stores 24
DIY sales declines y/y in 2013, yet chains plans further expansion 24
Ikea’s sales in Poland up 9% y/y in 2013 24
Grupa Grass completes acquisition of furniture, lighting equipment retailer Duka 24
Leroy Merlin buys online shopping service, to further expand chain 25
Jula to open three units in 2014, aims for Poland to become its largest market 25
Swiss-based company buys Praktiker chain in Poland 25

Table 1 Average monthly expenditures on consumer goods per capita in 2003-2012 (PLN, annual, by product) 7
Table 2 Retail sales dynamics at constant prices in 2012-2013 (y/y, quarterly, FY) 8
Table 3 Number of petrol stations of retail operators in 2011-2013 12
Table 4 Number of petrol stations owned by retail chains in 2007-2013 (annual, number) 12
Table 5 Major clothing, clothing accessories retailers by total operating revenue (PLN thou, latest reported fiscal year, 2013 or 2012, respectively) 16
Table 6 CCC S.A.- Selected financials in 2010-2013 (PLN thou, annual) 17
Table 7 VISTULA GROUP S.A.- Selected financials in 2010-2013 (PLN thou) 17
Table 8 LPP S.A.- Selected financials in 2011-2013 (PLN thou, annual) 18
Table 9 Wojas S.A.- Key financials in 2012-2013 (PLN thou, annual) 19
Table 10 Hygienika S.A.- Key financials in 2012-2013 (PLN thou, annual) 23

Figure 1 Household expenditure by type in 2012 (% in total) 6
Figure 2 Retail sector spending by segment in 2011-2018f (PLN bn) 7
Figure 3 Consumer market demand in 2007-2017f (USD mn, y/y) 7
Figure 4 Retail sales index in 2007-2014 (monthly, y/y in %) 8
Figure 5 Retail sales by structure in 2012-2013 (current prices, FY, % in total) 9
Figure 6 Breakdown of petrol stations market at end-2013 (%) 12
Figure 7 Market demand for apparel in 2007-2017f (USD mn, annual) 15
Figure 8 Market demand for footwear in 2007-2017f (USD mn, annual) 15
Figure 9 Household appliances demand in 2007-2017f (personal consumption, USD mn, annual) 20

Number of pages: 25
Release Date: Tue, 29 Apr 2014