Poland: There is room for hard discounters
Updated: Aug 4, 2020
The current Polish Discount Retail market developments are motivated, apart from investments in the stores and warehouses, by an excellent response to the needs of consumers in terms of the assortment range and manner of shopping. The current economic situation may affect the further development of the Discount Retail format, says Konrad Wacławik, Client Team Manager at Nielsen Connect Polska in an interview with the media portal dlahandlu.pl.
The discount market in Poland has been growing steadily for many years. DiscountRetail stores currently account for about 33% of the Polish retail market, which in relation to some European countries is high, but not the highest. In countries such as Norway, Denmark and Belgium, discounters have an even stronger position.
Discount stores provide many benefits:
shopping place close to home,
development of the BIO offer,
Currently, discount retail chains have come very close to small, sometimes exclusive supermarkets in their concept, drawing the best from various channels. Therefore, this creates a place for chains that will position themselves as the so-called "hard discounters", where the main goal is to communicate the price, to ensure a large stock of products at the most competitive prices, forgetting the design and/ or marketing - believes Konrad Wacławik.
According to the Nielsen expert, the potential development of this hard discount format may be influenced by the current economic situation. The increase in food prices, prospects on the labor market and the announced increase in unemployment will certainly encourage buyers to look for cheaper products. Another argument in favor of the fact that there is room for this type of hard discount stores may be the observation presented during the Trend Week K20 event. The Nielsen researchers pointed on the lack of clear customer segmentation and focus. As hard discount stores, focuse solely on offering and communicating to consumers looking for the lowest price. This could fit the needs of specific customer groups and create new loyal customers - explains Konrad Wacławik.
The Nielsen expert also added that we must not forget, however, that nowadays it is crucial for Poles to search for good quality at the right price. In recent years, customers have been paying much more attention to the quality of products. Despite the pandemic and the more difficult situation, we are currently still observe a growth of eco-, health- and functional- product trends. It will certainly be a challenge for hard discount stores, at the same time when competition remain promoting price.
However, observing the current economic situation and portfolio of the discount chains active on the Polish market, Nielsen states that there is place for hard discounters, although it is for a very specific group of recipients, at the moment rather not mainstream.
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