The debt of the retail and wholesale trade sector has now reached 2.6 billion PLN. More than half of that amount burdens sole proprietorships, according to the latest data from the National Debt Register (KRD). What’s more, their liabilities have grown by nearly one-quarter over the past three years, reaching 1.4 billion PLN. And the problems of small shops don’t end there. The deposit-return system, introduced in October, may generate additional costs and affect competitiveness.
As recently as December last year, total debt across the entire trade sector stood at 2.4 billion PLN. It has now surpassed 2.6 billion PLN. Wholesale trade accounts for over 1.6 billion PLN of unpaid liabilities, while retail trade owes 1 billion PLN. The average outstanding debt per debtor has also increased, reaching 42.4 thousand PLN. Sole proprietorships are in an especially difficult position, as they are responsible for more than half of all overdue debts in the sector.
Trade is growing… in debt
Overdue liabilities of sole proprietorships in the trade sector increase year after year. Twelve months ago they totaled just under 1.3 billion PLN, and today they amount to 1.4 billion PLN. Specialized shops and agricultural, food, machinery and household goods wholesalers accumulated 510.3 million PLN, while retail trade in food, beverages and other goods is responsible for 681.4 million PLN.
“The scale of financial problems in the trade sector is also reflected in the rising number of insolvencies. According to data from the Central Economic Information Centre (COIG), by the end of September this year there were already 6 percent more bankruptcies and restructuring cases in the trade sector than in all of last year. Sole proprietorships stand out in particular, with nearly 1.5 billion PLN of debt. Yet although the total amount owed by the smallest shops continues to rise, the number of debtors has declined. Three years ago there were nearly 3,000 more of them. That may mean that some resolved their problems and were removed from the register, but those with large financial burdens have only worsened their situation — as shown by the average debt per debtor, which increased from 26.6 thousand PLN to 35.6 thousand PLN over the past three years,” says Adam Łącki, CEO of the National Debt Register.
Grocery stores under heavy pressure
The smaller the business, the more it is affected by operating costs such as rent, storage, and labour. Small shops must also compete on margins with large retail chains that can offer significantly better prices due to their scale. Another factor is the growth of e-commerce and changing consumer habits, with more people choosing to shop online. According to data from the Polish Chamber of Commerce (KIG), in September this year online sales increased by 8.8% year-on-year — faster than overall retail sales (6.6%).
In October, the new deposit-return system joined the range of challenges faced by trade businesses. The scheme aims to boost recycling and reduce landfill waste. When buying plastic bottles up to 3 litres, aluminium cans up to 1 litre and reusable glass bottles up to 1.5 litres, customers will pay a refundable deposit. Only large shops of over 200 sq m selling such products are required to participate and collect returns. Small shops must accept only reusable glass bottles if they carry them in their assortment. For other deposit-covered packaging, participation is voluntary — although market pressure may force smaller stores to join.
“Although Statistics Poland (GUS) data shows a revival in retail sales — up to 3.9% year-on-year in the first three quarters of this year — this growth concerns mainly furniture, electronics and household appliances, textiles and clothing. It does not include food and beverages, where sales fell by 0.4% during this period. This is a bad sign for small grocery stores. The introduction of the deposit system may be another cost and another problem for them,” says Adam Łącki.
According to the Polish Chamber of Commerce, if a shop does not join the system, customers will have one more reason to choose large stores for convenience. Based on other countries’ experience, the Chamber estimates that revenues may fall by as much as 30%.
Trade in financial distress
The deposit-return system can entail additional expenses. Installing the required software, assigning staff to handle returns, and “pre-financing” deposits until they are paid by customers all pose real challenges for the smallest businesses. Meanwhile, small retail shops already owe creditors 681.4 million PLN. There are more than 22,000 such debtors listed in the KRD, and the average debt is nearly 30 thousand PLN. The biggest debtor has accumulated over 3 million PLN in liabilities. But for a small business, even temporary loss of liquidity can be dangerous — which is why firms are seeking ways to avoid trouble.
“We are observing changes in how small retailers approach financing of daily operations. Their interest in quick access to cash is growing—this trend has intensified since early 2024. Previously, the retail sector rarely used factoring services due to its specific business model, which involves few invoices with deferred payment terms. Since the beginning of this year, compared to the same period last year, the number of retail entrepreneurs seeking cash advances has increased by 151%, and the amount of financing by 249%. The average value of such refinancing is currently 54 thousand PLN. Cash-based solutions meet the immediate needs of retailers who require fast access to working capital without complicated procedures,” explains Emanuel Nowak, expert at factoring company NFG.
Sole proprietorships engaged in wholesale trade have accumulated 759.6 million PLN in unpaid liabilities. Nearly 17.9 thousand such businesses appear in the KRD, and the biggest debtor owes 6.8 million PLN. According to the NFG expert, external financing is part of daily operations for wholesale companies.
“This year, the number of micro-wholesalers applying for factoring increased by 15%, while the value of financing rose by 9%. These businesses most often choose confidential factoring, which accounts for 42% of financing in this sector — revealing the importance of discretion in relations with customers. The next most popular forms are open factoring (30%), eCash (22%), and reverse factoring (6%). The average financing value in this case exceeds 115 thousand PLN,” says Emanuel Nowak.
Mazovia, Silesia and Greater Poland in trouble
Sole proprietorships in the Mazowieckie region have accumulated over 250.4 million PLN in debt — the highest amount in the country. Silesia ranks second with 195.5 million PLN owed, followed by Greater Poland (Wielkopolska) with 158.1 million PLN. The lowest levels of debt among small trade businesses are found in the Opolskie (26 million PLN), Podlaskie (26.7 million PLN) and Świętokrzyskie (31.6 million PLN) regions.
The largest creditors of sole proprietorships in the trade sector are financial institutions — banks, credit unions, insurers and securitisation funds — which together are trying to recover more than 1 billion PLN. The second-largest group consists of other trading companies (141.3 million PLN). Unpaid invoices to telecommunications operators amount to 41 million PLN, and to energy companies 32.7 million PLN.
But micro-sized trade businesses also have their own debtors. Other industries owe them a total of 131.4 million PLN. The largest debts belong to the trade sector itself (39.4 million PLN), followed by construction (34.6 million PLN) and manufacturing (18.3 million PLN).
