“As in previous quarters of 2021, new retail warehouses and small retail parks dominated on the Polish market in the three months to September. Key market players included DIY and furniture retailers who continued to expand their store chains. New stores were opened by Agata Meble in Bydgoszcz, Castorama in Żary (in the building vacated by Tesco), Leroy Merlin in Kutno and in Bydgoszcz (also in the former Tesco building). The largest completion in the shopping centre sector was the 15,000 sq m extension of Focus Mall in Zielona Góra,” says Ewa Derlatka-Chilewicz, Associate Director, Consulting & Research, Cushman & Wakefield.
40 new projects under construction
At the end of the third quarter of 2021, more than 470,000 sq m of retail space was under construction and scheduled for delivery in 2021-2022. The largest projects underway included the redevelopment of Tesco’s hypermarket in Warsaw into a new 30,000 sq m home improvement centre of Leroy Merlin, the 25,000 sq m extension of the Atut Ruczaj shopping centre in Krakow, Galeria Bawełnianka in Bełchatów (23,000 sq m) and Galeria Andrychów (24,000 sq m). Over 60% of the development pipeline will be delivered in smaller cities with a population below 100,000. Looking ahead, we will continue to see convenience shopping centres and small retail parks being added to the existing retail stock. Small retail parks currently account for more than half of all schemes underway and scheduled for opening in the fourth quarter of 2021.
Two global brands make debuts
Poland remains an attractive market for international retailers. The third quarter of 2021 saw two global brands make their debuts: Rituals Cosmetics, a Dutch cosmetics brand with presence in 33 countries worldwide which opened its first Polish store in Westfield Arkadia, and Colynn, a fashion boutique with Italian and French womenswear (Galeria Północna).
Retail sales continue to rise amid a stable share of e-commerce
According to data from the Central Statistical Office (GUS), September 2021 retail sales in constant prices were up by 5.1% year-on-year versus a 2.5% increase in September 2020. Retail sales, however, fell by 2.4% compared to August 2021. Total retail sales for the first three quarters of 2021 were up by 7.3% year-on-year versus a fall of 3.1% in 2020. In September 2021, the strongest growth in retail sales compared to the same period in 2020 was reported for textiles, fashion and footwear (up by 14.5%), pharmaceuticals, cosmetics and orthopaedic equipment (8.2%), as well as furniture, electronics and home appliances (8%).
“Before the pandemic, the online retail penetration rate (the share of total retail sales) stood in Poland at around 5%-6%. Due to successive trading restrictions and many weeks of a blanket ban on brick-and-mortar retailing, e-commerce was the only distribution channel available to many retailers. Poland saw its online retail penetration rates reach the all-time highs of 11.9% in April 2020, 11.4% in November 2020 and 10.8% in April 2021. However, as the restrictions on shopping centres were eased, consumers returned to brick-and-mortar stores,” says Beata Kokeli, Partner, Head of Retail Agency Poland, Cushman & Wakefield.
The third quarter of 2021 saw the online penetration rate in current prices stabilise at 7.4%-8.4%. Traditionally, the highest rates were for fashion (21.9%), multimedia (press, books and other sales in specialised stores, at 22.5%), as well as furniture and electronics (16.2%).
Shopping centre footfall bounces back close to pre-pandemic levels in September 2021
In the third quarter of 2021, shopping centre and retail park footfall averaged 365,000 visitors per month, representing just a 6% decrease on 2019’s level. The cumulative footfall for January-September 2021 was down by 23% compared to the same period in 2019 and up by 14% on 2020. Last year’s footfall volumes for the first three quarters fell more sharply, by 26% on average. This is an indication of moderate optimism among buyers returning to their pre-pandemic preferences for shopping locations.
Cumulative turnover for January-August 2021
Turnover data for shopping centres shows that retail sales in August 2021 were up by 7% year-on-year, but down by just 3% on the same month in 2019. Average turnover for January-August 2021 grew by 3% compared to the previous year, but was down by 30% on 2019’s level. However, if compared to the turnover for the months when shopping centres were permitted to operate in a restriction-free environment, falls averaged only 9%.