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Poland Food and Drink Report Q1 2011
Business Monitor International, Dec 2010, Pages: 89
The Poland Food and Drink Report provides industry professionals and strategists, corporate analysts, food and drink associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Poland's food and drink industry.
The Polish consumer remains in strong shape. While belt tightening remains a core scenario across much of Western, Central and Eastern Europe as over-leveraged households, fiscal austerity and weak job markets combine to reduce spending (especially on non-essential goods), buoyant domestic demand remains a major driver of the Polish economy.
Headline retail sales data compiled by Poland's Central Statistical Office continues to reinforce our convictions, with September 2010 sales up by 8.6% year-on-year. With the economy faring well and retail sales growing robustly, conditions in the labour market have unsurprisingly been improving after coming under pressure in 2009.
Unemployment has begun to moderate, and we expect it to continue doing so, falling from 13.2% in February 2010 to 11.5% in September, which is a remarkably good figure by historical standards. Furthermore, employment has also resumed its upward trajectory, rising by 1.8% y-o-y in September and taking total employment close to its pre-global financial crisis high.
Headline Industry Data:
2010 per capita food consumption +5.86%=; forecast to 2015 =+40.68%
2010 beer volume sales = +0.52%; forecast to 2015 = +6.52%
2010 mass grocery retail sales = +13.4%; forecast to 2015 = +60.27%
Key Company Trends Key retailers Competing On Store Growth As Carrefour Re-Vamps Strategy – With food retail booming, Poland's leading retailers are investing heavily in store expansion as much of the country is still dominated by informal independent retail channels. Having largely focused on launching hypermarkets on the periphery of Poland's largest cities, Carrefour is revamping its strategy. It is expected to place a much greater emphasis on launching smaller stores in towns, with plans to launch around 100 smaller supermarkets a year. A more aggressive Carrefour strategy in Poland would reflect the fact that it is increasingly looking to focus on markets where it is a market leader or has the possibility of becoming one.
In our opinion this change in course to a large extent reflects the success had by Poland's leading discount retailer Jerónimo Martins-owned Biedronka over recent years. It operates more than 1,500 stores, is growing market share and is particularly competitive in smaller towns where it is well placed to compete with independent stores. It would take Carrefour a number of years to generate a comparable level of scale. Biedronka is not resting on its laurels. It is growing its store count by about 150-200 a year.
Alcoholic Drinks Sales Affected By Excise Hike – Although the Polish consumer has come through the last 18 months in much better condition than most of the regional counterparts, beer sales have still come under the weather with higher excise rates a big factor. In March 2010, Heineken-owned Polish brewer Grupa Zywiec posted an 11.1% year-on-year (y-o-y) decrease in net profit to PLN369.5mn for FY09, while sales declined by 2.4% y-o-y to PLN3.72bn (US$1.3bn).
Risks To Outlook Even though Poland has demonstrated its capacity to come through even the sternest externally driven economic examination without falling into recession, and employment continues to move favourably despite austerity measures across the eurozone, further external shocks could still dent this trajectory.
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