Avoid Poland

In its report on 'Emerging Market Priorities for Food Retailers', A.T. Kearney puts Eastern Europe down as the most attractive region for international food retailers. Of the countries in that sub-continent, they'd be advised to turn to in the near future, Poland however comes some way down on the list

A.T. Kearney, the international management consulting firm, conducts research using its Global Retail Development Index (GRDI), which ranks emerging countries according to their economic and political risk, their levels of retail saturation and the difference between their Gross Domestic Product (GDP) and retail growth.
Though China was perceived as the opportunity of the year in the 2002 GRDI, it's now seen as more competitive and a less attractive target. Russia has most appeal for 2003 but the report warns that so did Poland five years ago, and now it's one of the most crowded markets.

Flexibility and timing
Though retailers tend to rank flexibility and timing as the two least significant factors when expanding internationally, this analysis reveals that the contrary is true and it is best for companies to enter markets with two formats (for example supermarket and hypermarket together) rather than just the one. Sensitivity to changing circumstances is also another key factor in a retailer's success. Both knowing when to start business in a new country and how long it takes to get operations up and running, are critical. The report does not advise either a slow or fast entry, just one where a complex set of circumstances are considered.
In Eastern Europe
The GRDI ranks emerging countries based on four criteria: economic and political risk, modern retail area per inhabitants (retail saturation level), the number of retailers present locally and the "time factor" or how quickly a country should be entered as determined by the difference between GDP growth and retail growth. Emerging countries are categorized into three types "on the radar screen", "to consider" and "to avoid".
With forty per cent of the GRDI countries "on the radar screen" and "to consider" from Eastern Europe, the region is held to be the one with the most promise. Russia comes first, both in this category and of all the countries in every continent considered. Slovakia comes second and Hungary fourth overall.
Both Poland and the Czech Republic are considered less attractive countries, the former's ranking having fallen by two points. This might continue due to economic and political issues, strong retail activity and a relatively mature market, where a process of concentration is underway. Mergers and acquisitions between HIT and Tesco and Jerónimo Martins and Ahold are examples of this phenomenon. One source of hope for fresh blood on the Polish market however, is the American Wal-Mart, which is considering starting up operations here.