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Polish Retail Market to See Modernization Wave, New Formats in 2024

COMMERCEPolish Retail Market to See Modernization Wave, New Formats in 2024

The year 2023 was particularly active in terms of mergers and acquisitions in the retail sector, and the up-coming year will be marked by a wave of modernization and creation of new formats. Experts from Colliers, the leading consulting company in the commercial real estate market, have prepared an overview of the most significant events in the industry over the past 12 months, as well as predictions for 2024. The need to adapt properties to ESG requirements and the changing expectations of consumers will have a significant impact on the market.

Key events in the Polish retail market in 2023

  1. Mergers and acquisitions

In 2023, numerous activities were observed in the M&A market. In the past year, Go Sport – a network sanctioned in relation to Russian capital – gained a new owner, SPORTSDIRECT.COM Poland. Activity from Ukrainian companies seeking new development directions was noticeable in Poland. The example is EpicentrK, which became an investor in Intersport Polska. However, these were not the only significant transactions. In 2023, Benefit Systems announced the acquisition of 16 clubs belonging to Calypso Fitness, and Lagardère Travel Retail became a franchisee of 131 Costa Coffee outlets in Poland and 11 in Latvia.

  1. Gastronomic concepts fostering relationship building

The year 2023 was abundant in new openings and transformations of gastronomic spaces. Examples are the opening of food halls in Gdańsk, Bydgoszcz, and a sector in the Renoma project in Wroclaw. More such spaces are under construction or in the investors’ plans, not only in the largest cities.

Agneszka Winkler, Associate Director, Strategic Advisory Department at Collier, explained, “The popularity of food halls stems from the offering that provides unique experiences and promotes relationship building. They are gaining importance in realizing modern properties, especially multifunctional complexes in city centres. It should be emphasized, however, that such spaces are facing increasing competition, and the ability to respond to local needs determines their success.”

A distinguishing feature of Polish food halls is their diversity and uniqueness – about 90% of tenants are non-chain concepts.

  1. Well-known brands in a new format

New formats have also been launched by brands already known in Poland. Examples include DIY chains that have introduced smaller concepts – such as Castorama Smart, Express, Pszczółka Express, and IKEA, which is developing the Studio Planning concept. Decathlon launched the first store in the Easy format, adapted to downtown locations.

From the service sector, new formats were presented by Auchan with the introduction of a self-service store in Warsaw and Żabka, which launched the Drive option in the Warsaw agglomeration.

  1. Developers’ activity: retail parks and modernization of existing facilities

Developers concentrate their activity on small facilities with a convenience profile, mainly located in smaller centers. During the first three quarters of 2023, as much as 73% of the new supply was delivered in the retail park format. Some of the retail parks opened this year were created based on the closed buildings belonging to the Tesco chain from previous years.

  1. Debuts in the Polish market

In 2023, several brands made their debut in Poland – Lush, Candy Pop, Woolworth, Solmar. Retailers Zwieger, Centrumrowerowe.pl and Brokuł Spot have opened their stores. In the gastronomy segment, Master Burger and Popeyes started operations.

Forecasts for 2024

  1. Renovations, modernizations, reuse of real estate

Due to the legal regulations imposed by the EU and the growing awareness of sustainable development, the year 2024 will be marked by the renovation and modernization of retail buildings in an eco-friendly direction, focusing primarily on the energy efficiency of the buildings and reducing CO2 emissions.

Wojciech Wojtowicz, an analyst in the Advisory and Market Research Department at Colliers, said, “In selected locations where we note high market saturation, and the facilities face high competition and high levels of vacant space, we anticipate changing the function of parts or whole retail properties.”

  1. Multifunctional projects

Colliers experts indicate that multifunctionality is one of the key directions for the development of commercial facilities. Currently, projects such as Waterfront in Gdynia, Towarowa 22 in Warsaw, and Quorum in Wrocław, which combine office, residential, and commercial functions, are in progress.

Wojciech Wojtowicz predicts the opening of the Food Hall type projects in 2024 in cities like Radom and Łódź. Moreover, a renovation of the historic Hala Gwardii in Warsaw is planned.

  1. Development of retail in residential investments

In 2023, changes in the retail sector caused by the pandemic have become more established. Consumers are still looking for “locality,” quick and easy access to meet their daily needs near their place of residence.

An response to these needs are small stores located in residential investments – both for sale and in buildings intended for institutional rent.

Karol Milczarski, Senior Associate in the Retail Space Division at Colliers emphasized, “This approach meets consumers’ needs in the field of shopping, services, and gastronomy. However, the appropriate selection of tenants is crucial.”

  1. New concepts of known brands and regional debuts

The experts predict that 2024 will continue to see the trend of opening new concepts of brands already known in the Polish market. We will surely hear about debuts and newly opened locations of brands from Baltic countries and Ukraine, planning expansion into Poland.

  1. Economic approach to shopping

The ongoing development of brands with an economic profile will be continued. This will be favored by the number of investments (especially the construction of retail parks) located in small cities.

Wojciech Wojtowicz from Colliers points out, “The NBP’s inflation forecast assumes a slowdown in price growth. The inflation indicator y/y at the end of 2024 may be 4.6%, so above the inflation target. This may affect consumer choices and a conscious approach to prices, and thus the further development of discount brands.”

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