Retail sales continue to rise amid a falling share of e-commerce. A summary of Q2 2021 on the Polish retail market

123,000 sq m was added to Poland’s retail stock across all formats in Q2 2021 with another 30 new projects underway. Shopping centre footfall is also on the rise, reveals a summary produced by global real estate services firm Cushman & Wakefield.

Q2 2021 saw 123,000 sq m of retail space built, mostly in small retail parks and standalone retail warehouses

123,000 sq m was added to Poland’s retail stock across all formats in Q2 2021. The new retail space supply comprised nine schemes, the largest being the 29,000 sq m IKEA store in Szczecin. Other Q2 completions included the Sekunda shopping centre in Jędrzejów, Galeria Odyseja in Brzesko, Vendo Park in Koszalin, Saller Retail Park in Nowa Sól, Arkadia Park in Lębork, Vendo Park in Piekary Śląskie, and home improvement stores: Castorama in Rzeszów, Castorama in Olsztyn and Leroy Merlin in Gorzów Wielkopolski. All the three newly-opened DIY stores comprise retail space returned to Poland’s retail stock following the conversion of Tesco’s shopping centres which were closed in recent months. Additionally, extensions of two retail schemes were completed: Galeria Ostrovia in Ostrów Wielkopolski (2,500 sq m added) and Park S1 in Kutno (3,800 sq m added).

Also, due to its withdrawal from Poland, Tesco closed another four stores in Q2 2021: in Bytom, Głogów, Kalisz and Lubin. Additionally, Castorama closed its existing DIY store in Rzeszów to open a new one in a different location in the same city (mentioned above).

New retail space supply in the first half of 2021 totalled close to 200,000 sq m. At the same time, 70,000 sq m came off the market following the closure of Tesco’s stores.

The development pipeline comprises 30 new projects, with retail parks accounting for more than half

More than 450,000 sq m of retail space is currently under construction and scheduled for delivery in 2021-2022. The largest projects underway include Koszalin Power Center (38,000 sq m), a mixed-use development Norblin Factory in Warsaw (26,000 sq m of retail floorspace) and Galeria Andrychów (24,000 sq m).

“Close to half of the development pipeline will be delivered in smaller cities with a population below 100,000. We will, therefore, continue to see convenience shopping centres and small retail parks being added to the existing retail stock,” says Małgorzata Dziubińska, Associate Director, Cushman & Wakefield.

Three new international brands enter the market

Q2 2021 saw three international brands enter the Polish retail market: an Italian shirt retailer Camicissima, which opened a store in the Galeria Mokotów shopping centre, Yargici – a Turkish brand offering women’s wear, accessories and homeware (in Galeria Mokotów) and LEGO, which opened its first store in Westfield Arkadia.

Retail sales continue to rise amid a falling share of e-commerce

According to GUS data, retail sales in constant prices in June 2021 were up by 8.6% year-on-year versus a 1.3% decrease in June 2020. Retail sales rose by 3.5% compared to May 2021.

Total retail sales for the first half of 2021 were up by 7.8% year-on-year versus a fall of 5.2% in 2020.

In June 2021, the strongest growth in retail sales compared to the same period in 2020 was reported for textiles, fashion and footwear (up by 22.3% against a 3.7% decrease last year).

“Before the pandemic, the online retail penetration rate (the share of total retail sales) stood in Poland at around 5-6%. Due to successive retail 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 rate reach all-time highs of 11.9% in April 2020 and 11.4% in November 2020. However, as pandemic restrictions were eased, consumers returned to brick-and-mortar stores, best illustrated by much weaker online sales following the lifting of lockdowns and the easing of the restrictions imposed on shopping centres,” concludes Małgorzata Dziubińska.

In June 2021, online retail sales in current prices were down by 8.2%. The online penetration rate fell from 9.1% in May 2021 to 8.1% in June 2021, with falls in online sales reported by most retailers, the sharpest for textiles, fashion and footwear (down by 2.7 pp.).

Shopping centre footfall in June 2021 only 8% lower than pre-pandemic and 19% higher than a year ago

“The moderate optimism on the Polish retail market is borne out by footfall levels for shopping centres and retail parks which in May 2021 were on average 37% up year-on-year and 15% lower than in the pre-pandemic 2019. In June 2021, footfall was also higher than in the same period in 2020 (up by 19%) and only 8% below the level seen in June 2019,” adds Małgorzata Dziubińska.

Cumulative turnover for January-May 2021 down by 23% year-on-year

Turnover data for shopping centres shows that retail sales were up in May 2021 by 24% year-on-year, but down by 16% on the same month in 2019. The cumulative fall in turnover for January-May 2021 averaged 23% compared to the previous year.

Download the full report HERE.

Author:

Cushman & Wakefield

Last Updated on August 19, 2021 by Łukasz