The grocery retail market in Poland will grow by as much as 4.2% in 2019, aided by new household income-boosting measures, such as extension of the Family 500+ programme to the first child in each family, the 13th pension, or tax reductions. In absoute terms, the market will increase by nearly PLN 12bn (€2.8bn), according to a new report from PMR, “Grocery retail market in Poland 2019. Market analysis and development forecasts for 2019-2024“.
What is the value of Poland’s grocery market?
The positive impact will also be visible in 2020, with the pace of market growth projected to be similar to 2019. But we should not expect the kind of acceleration witnessed in 2016-2017, when Family 500+ came into force. Nevertheless, the outlook for the next five years is bright. The market is projected to grow by at least 3% per annum in the years until 2024.
Legal changes affecting grocery market
Recent years have been characterized by a growing influence of state policy on the grocery retail market in Poland. One example is the ban on Sunday trade in force since 2018, which already applies on three Sundays per month and will apply to all but a handful of Sundays from 2020. Another is the tax on retail sales enacted in 2016, which is currently suspended but looks likely to be implemented in 2020, after the General Court of the European Union ruled in favour of the Polish government in its dispute with the European Commission. According to our estimates, the market leader, the Biedronka chain, will pay about PLN 750m (€174m) in this tax. Eight other grocers will qualify to pay its top rate, 1.4%, which will apply to monthly sales turnover above PLN 170m (€39.5m).
Examples of other regulations planned or considered by the government include an increase in the excise duty on alcohol and tobacco from 2020, and possible restrictions on the share of private labels in the offer of grocery chains. Whether the latter proposal becomes a reality, however, will depend heavily on the results of the parliamentary elections to be held in Poland in the autumn.