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COVID-19 pandemic dominates Q1 on the retail market

Warsaw, April 28, 2020 In Q1 2020, approximately 50,000 sq m of modern retail space was delivered to the market. The construction of four schemes was completed: Galeria Chełm (17,500 sq m), Stop Shop Siedlce (14,100 sq m), Galeria Kupiecka in Otwock (10,000 sq m) and Vendo Park Jawor (6,700 sq m). However, due to onset of the coronavirus epidemic, the new shopping centres have limited possibilities to serve consumers, in the same as all large retails facilities in Poland.

 

The state of epidemic announced, the Health Minister has introduced a regulation banning the operation of retail schemes with a sales area of over 2,000 sq m. According to the new regulation, as of March 14, 2020 until further notice, commercial activity in these facilities is prohibited. Exceptions include grocery stores, pharmacies, laundries and financial institutions. The regulation also requires restaurants and cafes throughout the country to provide only take-away or delivery services. As of April 1, additional restrictions ban completely the operation of hairdressing, beauty, tattooing and piercing salons, and close DIY stores at weekends until further notice. In addition, general safety rules and the number of customers allowed  in stores were tightened.

 

Charity activities

 

Shopping centres and tenants alike are involved in initiatives that support the fight against the pandemic. Declared assistance is varied and includes financial support for hospitals (e.g. Carrefour, Ikea, Lidl, Kazar, CCC, 4F), distribution of free meals to medical staff (e.g. AmRest), purchase of SARS-CoV-2 diagnostic tests (e.g. Kaufland) and filling shortages of protective equipment for medical personnel and providing food products. The total value of funds donated is estimated in tens of millions of PLN.

 

In the current situation, also large food stores cooperate with charities to donate unsold food free of charge to those in need. The obligation is directly linked to the Act on Counteracting Food Waste, passed in July last year (Dz.U. 2019 poz. 1680).

 

„The retail sector is undoubtedly one that will be very badly affected by the COVID-19 pandemic, which will consequently initiate many changes in the future. Today, it is difficult to assess the long-term effects, both negative and positive. From a short-term perspective, we are already observing a significant increase in online shopping, with the largest ones being recorded in the food sector. For many shops, the online channel has become their only chance

to do business. Some tenants, who have previously operated in regular shops only, have launched their e-commerce channel, e.g. Ziaja. Others see their chance to establish partnerships with marketplaces, which makes their sales platforms available, e.g. MediaMarkt and Auchan have decided to cooperate with Allegro. The zakupyuswoich.pl platform that supports local Polish businesses has been launched, which enables online shopping in small Polish grocery and multi-branch shops”, says Dominika Jędrak, director of Research and Consultancy Services at Colliers International.

 

The outbreak of the coronavirus epidemic in Poland was certainly a major influence on the domestic retail market. Two other Q1 highlights are worth mentioning:

 

February 20, 2020, the Office of Competition and Consumer Protection (UOKiK) has given permission for Kaufland Polska Markety to take over four hypermarkets currently operating under the Tesco brand. The agreement covers Tesco in Lublin, Ostrołęka, Wrocław and Warsaw.

 

Echo Investment has signed preliminary purchase agreements for land plots in Poznań, Łódź and Kraków, where Tesco shopping centres are located. The investor informed that mixed use complexes (apartments, offices and retail functions) will be built in place of the existing facilities.


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Dominika Jedrak

Director

Warsaw

Dominika joined Colliers International in 2011 at the position of Head of Research and Consultancy Services, where she is responsible for managing and coordinating the work of the department, carrying out of the projects for external clients, preparing reports, etc. Dominika is related to the real estate industry since the beginning of her career. 

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