It is to be expected that sooner or later the coronavirus epidemic will also appear in Poland. Therefore, we have analysed scenarios of impact on the Polish grocery retail market, depending on the development of the epidemic on the territory of Poland and neighbouring countries.
1. Few cases of disease in Poland
Even if currently there are no cases of the disease in Poland (as on March 2 in the morning), it should be expected that sooner or later such cases will occur. If the epidemic in Poland is limited to individual cases (even several dozen or several hundred, but scattered across the country), and the authorities and the health service will be able to keep the situation under control, a strong impact on the retail market should not be expected. Internet commerce may gain, probably also small shops close to home – consumers will want to limit their presence in large groups of people, so all large-formats (supermarkets, hypermarkets and discounters) may notice a lower turnout. However, the positive impact on these channels will be limited – first of all, online shops have limited delivery possibilities – it is not possible to increase the vehicle fleet at a rapid pace. Secondly, their full offer is available in a limited area, still few retailers in Poland have developed internet sales. The impact on the whole food market will also be relatively small – even if consumers buy for stock, only part of the products are suitable for long storage and can be consumed at a later date, so sales during the year should even out. The greater risk is the development of epidemics in countries from which we import food – this could translate into supply problems. However, Poland is still a very large food producer, which should facilitate the supply issue.
2. Larger concentrations of affected patients, introduction of quarantine in selected regions of the country
This scenario would have a more negative impact on the market. There could be problems with the transport of goods even within the country, closures of production facilities, shops and logistics centres in the quarantine areas, and even in ‘healthy’ areas consumers would be likely to go to shops to stock up. If there were problems in meeting the basic needs of consumers, this obligation might have to be taken on by services – e.g. the army. Then the impact on the food market would certainly be negative and a significant negative impact on market dynamics would be expected.
3. High number of morbidity and deaths, rapid development of the epidemic throughout the country
Although the most negative, it is fortunately the least likely scenario. With the rapid development of the epidemic, shops would be emptied quite quickly. The transport of products would be difficult, shops and workplaces would be closed, probably the black market would develop very quickly, because the services might not be able to provide food supplies to all the inhabitants of the country.
PMR’s latest forecast of the grocery retail market assumes a 4.3% year-on-year increase in 2020. (nominal value, including inflation). The scenarios developed for 2020 assumed (depending on many factors) an increase in the range of 2.4-5.9% and we are convinced that the food market dynamics will eventually fall within this range. It should be taken into account that at this point in time there were about 87 thousand cases worldwide. The mortality rate is about 3%. Taking into account that the fight against the epidemic has been going on for about 2 months – it is a relatively small number of cases, the spread of the disease is also slower than one would expect in such a globalised world.