Awaiting the reopening of shops and service outlets to go shopping at traditional brick-and-mortar stores, positive footfall results achieved by most shopping centres in May, the opening of a second Primark store with a third one in the pipeline, plus a strong debut of a new Polish off-price concept – these are some of the key news and developments to have taken place in the retail sector in Q2 2021, according to BNP Paribas Real Estate.
Shoppers were waiting for the easing of restrictions and the reopening of most of the shops and service outlets in shopping centres to go shopping at traditional brick-and-mortar stores. The beginning of May brought with it record-breaking footfall and turnover resulting in a whiff of optimism in the air for tenants and shopping centre operators alike.
4th May was the day restrictions were eased following the fourth lockdown, with the majority of shops and service outlets in shopping centres being able to welcome customers again. The first week of May ended with the best reopening results recorded by shopping centres so far immediately after the end of a coronavirus-related lockdown. Analysts at BNP Paribas Real Estate Poland reveal that the average footfall for retail schemes between 3rd and 8th May reached 97% of the result recorded in the corresponding period in 2019. The beginning of June was equally positive with footfall figures similar to those recorded before the pandemic. Additionally, the volume of turnover recorded in May—which significantly exceeded the figure from last year—stands as proof that the Polish population did not fall out of love with shopping at traditional brick-and-mortar stores.
Stock changes
127,000 sqm of new space were delivered to the market in the second quarter of this year. The group of the three biggest openings is headed by the Szczecin IKEA store (29,000 sqm and 750 free parking spaces) launched exactly on the day marking the 60th anniversary of the brand’s presence in Poland. The top 3 list also includes shopping centres located in smaller cities: Sekunda in Jędrzejów (13,000 sqm) and Odyseja in Brzesko (11 500 sqm).
Work on more than 317,000 sqm of retail space was underway between April and June. As per developers’ plans, we can expect schemes such as Fabryka Norblina, the Varsovian mixed-use concept(24,000 sqm of retail space only) and Galeria Andrychów to open their doors to customers later this year (Q3), where the ribbon at the opening of the Karuzela shopping centre in Kołobrzeg (30,000 sqm) is to be cut exactly a year later.
Debuts and announcements of new openings
The May reopening of shopping centres coincided with the debut of HalfPrice, a brand owned by the CCC group. The chain will focus on offering brand products at greatly reduced prices. Those behind the concept made it known that as many as 60 stores were to be opened before the end of the year. Meanwhile, another noteworthy event took place on 6th May. The Posnania shopping centre saw the opening of Poland’s second Primark store, with the chain taking up nearly 3,500 sqm in the new location. Moreover, the international brand originating in Dublin announced at the end of May that a third store was to be opened in the Bonarka shopping centre in Kraków. It will occupy two floors there, with the total area to cover more than 3,800 sqm.
The authors of the report bring attention to the regained high momentum of traditional retail sales, which is balancing out the volume of turnover achieved by e-commerce. In terms of constant prices, traditional retail sales increased in May by 13.9% year-on-year, and 8.2% month-to-month. At the same time, May was the month in which online sales, in terms of current prices, recorded a 7.8% drop. The share of online sales in the total figure dropped from the 10.8% recorded in April to a 9.1% result in May, which was clearly a direct consequence of the reopening of shopping centres.
Time for eco-brands and sustainable shopping
The consecutive lockdowns imposed on the retail sector, the economic slowdown and the persisting future uncertainty have affected the buying behaviour of the Polish population. The pandemic meant that consumers paid more attention to the prices of goods, which in turn opened up growth opportunities for budget and discount brands such as Pepco, Action, Dealz and KiK. They successfully attract consumers to their stores by offering attractive prices on a wide range of wares. Another aspect that the abovementioned brands are capitalizing on is the ease with which they fit in with the retail formats falling into the convenience category so popular today.
A crucial retail trend which has not suffered due to the pandemic or the resultant market turbulences is the promotion between Poles of sustainable shopping, the circular economy and the “zero waste” concept.
Fabrice Paumelle, Director and Head of Retail Leasing Department at BNP Paribas Real Estate says: “It was in this spirit that the Auchan chain introduced second-hand clothing from renowned brands to be purchased at attractively reduced prices to its stores.”
Natasa Mika Head of Retail Leasing Department at BNP Paribas Real Estate adds: “The chains are assuring consumers that the clothing comes from verified sources while being clean and sorted, which makes shopping much easier. Another important step to have been taken by Auchan in Q2 was the debut of its own Green InExtenso collection. 70% of the textiles used to manufacture the clothing are organic materials sourced from recycling, while additionally incorporating the “zero waste” principles and promoting frugal water consumption.”
