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POLES LOVE A BARGAIN

Polish retail has come a long way in 15 years — from state-run department stores to hypermarkets to flashy enclosed malls. Now the next big thing: discount grocers and factory outlets.

That Poles have enthusiastically taken to no-frills shopping is amply demonstrated through the growth of the Biedronka hard-discount grocery chain. Biedronka, owned by Portuguese retailer Jeronimo Martins Dystrybucja, now operates 725 outlets in Poland. The chain says it will have 1,000 up by 2007. This growth has come at the expense of the hypermarkets, especially market leaders Carrefour, Tesco and Royal Ahold.

Poland’s hard-discount sector has a distinctly German accent. Germany’s Tengelmann owns the fast-growing Plus chain, for instance, while the German Schwarz Group owns discounter Kaufland and also Lidl, perhaps the most aggressive discount grocery in Europe. Lidl carries a limited line of about 1,200 items, mostly food, but also small appliances, toys and apparel.

This lineup has plenty of appeal in the Polish market, which remains fragmented and price-sensitive despite the growth of hypermarkets in the past decade. More recently, the factory outlet sector has also been an up-and-comer. The first factory outlet opened in 2002 in the Ursus section of Warsaw and was so successful that a second phase is under way.

Taking the lead in the outlet category is Belgian development firm Liebrecht & Wood, whose Outlet Company venture opened a Fashion House center last year in the southern city of Sosnowiec and is now building similar centers in Warsaw and Gdansk, with others planned for Wroclaw and Poznan.

According to an AC Nielsen survey of East European market trends, 16 percent of Poles shop only in traditional retail outlets, a larger figure than in the other countries of the region. That means there are plenty of additional customers to convert to the virtues of low-price retail.

— CH