In 2023, the number of retail stores selling FMCG products in Poland decreased by 2 percent year-on-year. This means that over 2,300 outlets have disappeared from the market. According to the data from CPS GfK, the largest reduction was noted among non-network small-format shops, drugstores and kiosks. However, going against the trends, franchises have been consistently strengthening their position in the industry.
Increasingly, independent stores offering FMCG products in Poland is choosing to join franchise networks. In 2023, there were almost 55,000 grocery stores in the market, a decrease of 2 percent compared to the previous year. This consists of a rise in the number of network stores by 5 percentage points (40,300 stores) and a decrease in non-network stores by 18 percentage points (14,450 stores).
“Franchising is becoming an attractive solution that offers not only marketing support but also better trade conditions. The increase in the number of stores like Żabka, which operates on a franchise model, is a perfect example of this. Last year, Żabka, one of the largest franchise networks in Poland, significantly contributed to the increase in the number of small-format network stores,” comments Michał Maksymiec, director of cooperation with retail networks at GfK’s Consumer Panel Services.
Franchising prevails in uncertain times
Joining a franchise and being part of a network is clearly seen as beneficial by operators of small commercial formats. According to CPS GfK data, as many as 98 percent of small format network operators clearly see the advantages of this business model. The most frequently mentioned benefits include an attractive product offering (32 percent), the use of network recognition to attract customers (31 percent), and a reduction in store equipment costs (31 percent).
At the same time, operators have specific expectations that match the benefits offered: access to lower prices, better assortment fit, and refreshing the appearance of the premises. All these elements favor the growth of franchised stores.
“In uncertain times related to inflation, franchise store owners point out additional benefits related to finances and a sense of security. 23 percent of them point to more favorable payment terms, 22 percent bear lower supply-related costs, and 21 percent believe that being in a network makes it easier to survive market crises. These elements further strengthen entrepreneurs’ belief in the value of belonging to franchise networks in a dynamically changing market environment,” adds Michał Maksymiec.
Specialty stores have no cause for concern
An interesting phenomenon on the FMCG market in Poland is the stable number of specialty shops. According to the “Strategic Report”, in 2023, there were 22,860 specialty stores, such as fish stores, bakeries, meat and fruit and vegetable stores. “Even though Poles are increasingly looking for products at attractive prices, in the case of these formats and FMCG segments, the perceived quality and freshness of the product is a key factor in the choice of where to shop for fresh categories. Many consumers are thus strongly attached to specialty stores operating near their home, where they can ask for advice from a salesperson they often know well,” concludes the CPS GfK expert.
Source: https://ceo.com.pl/koniec-malych-sklepow-franczyza-podbija-polski-rynek-fmcg-48975
