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European Retail Briefing - November 2014
Analyst Comment
 
Are the discounters slowing in Poland?
●	In recent years, hard discounters like Biedronka, Lidl/Kaufland, Netto and Aldi have grown share in Poland.
●	This has tended to come at the expense of full-range, larger-store retailers, like Tesco, Carrefour and Real. 
●	But recent data suggest Biedronka is no longer outpacing Tesco.
●	In response, Biedronka is planning to open more stores in relatively under-served urban areas. 

Polish shoppers flocked to the discounters
In 2013, hard discounters Biedronka, Lidl, Netto and Aldi each grew market share in Poland, as we show in our new report, Supermarkets: More Than Just Food Retailing – Europe, November 2014. Larger-store, full-range grocers, like Tesco, Auchan, Carrefour and Real, continued to lose share, in line with the trend of recent years.

Mintel’s consumer research confirms Polish shoppers have embraced the discounters: our Tracker survey found 43% of Polish consumers have switched some of their grocery shopping to a discounter, at Q2 2014, compared to 34% in Italy, 30% in Germany and 25% in both France and Spain.

Is the tide turning in 2014? 
Biedronka is the market-leading discounter in Poland, and it is the only one to provide sales data (Aldi and Lidl are notoriously reticent to provide figures). 

While Biedronka’s total sales growth continued in the first half of 2014, this was driven by new store openings; in like-for-like terms, sales were down 1.2% in H1. Then in Q3 2014, Biedronka’s performance weakened further, with like-for-likes down 1.3%.

The company attributed the slowdown to deflation in food prices, in turn partly the result of Russian embargoes on Polish exports and therefore oversupply.

But in like-for-like terms, Biedronka is now being outpaced by Tesco Poland, which turned in H1 like-for-likes of -1.0%. And in Q3 2014, Carrefour noted Polish sales were “stable” – not hugely positive but perhaps a sign that shopper attrition is being stemmed.

We should not read too much into one period’s results, but this could be a sign of a turning point.

If so, why?
If shopper migration to discounters is faltering, this could well be due to a natural plateauing given the share that has already been gained:

●	Biedronka, Schwarz, Netto and Aldi together accounted for over 3,500 stores at the end of 2013 – with Biedronka contributing nearly 2,400 of these; 
●	As we show above, shoppers have migrated to the discounters more than in other major European markets. 

This does not mean there isn’t scope for individual discounters to gain ground: Aldi, for instance, had only 82 Polish stores at the end of 2013 – so there are opportunities for some discount chains to expand and so steal share.

And if the flight to discounters is being stemmed because of a natural plateau being reached rather than because of any actions being taken by non-discount supermarkets, this is not good news for the international superstore players who face the challenge of discounters in other markets – elsewhere, it means things could get considerably worse before they get better.

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