The wind is back in their sales

Almost 0.5 mln sqm of retail space was delivered in 2021 across all retail formats, comprising 45 new projects and 12 extensions. Net supply expanded by 370,000 sqm, even though 130,000 sqm had been taken out of the market. The highest concentration of new openings was in Q4 2021, when almost 50 pct of the new retail space supply came on stream in the last three months of the year. “In 2021, small retail parks and new retail warehouses dominated the Polish market, accounting for 43 pct and 34 pct of the new supply, respectively. Another notable trend was the growing share of the newest retail format, i.e. retail space in large, mixed-use developments such as Norblin Factory and Warsaw Brewery, which made up 7 pct of the new supply,” points out Ewa Derlatka-Chilewicz, an associate director at Cushman & Wakefield.

Small is profitable

More than 60 pct of the retail development pipeline will be delivered in smaller cities with populations of below 100,000. At the end of 2021, more than 370,000 sqm of retail space was under construction and scheduled for delivery in 2022–2023. The largest projects underway are in Warsaw, Kraków, Bełchatów and Andrychów, but most are in smaller towns. Retail parks account for more than 60 pct of the development pipeline. Additionally, small and mid-sized retail schemes exhibited more resilience to pandemic-related shocks in comparison with large and very large shopping centres. They reported significantly smaller decreases in footfall and turnover, and were able to make up for their losses more quickly.

Retail sales on the march

Retail sales improved in Q4 2021, rising by 12.1 pct and 8 pct y-o-y in November and December, respectively. Last year’s total volumes grew by 8.1 pct compared to 2020.

In 2021, the strongest growth in retail sales recorded over the year was for textiles, fashion and footwear (up by 32 pct), motor vehicles (10.7 pct), pharmaceuticals, cosmetics and orthopaedic equipment (8.6 pct), as well as newspapers, books and specialised stores (7.3 pct).

Online shopping continues to boom

The restrictions on traditional retail boosted the growth of the Polish e-commerce market. Poland’s online retail penetration rate stood at around 5–6 pct before the pandemic, but it peaked at 11 pct during the ban on brick-and-mortar retailing before falling back to 8 pct as the restrictions were eased. November 2021 saw the share of online retail sales rise to 11.4 pct, which is line with the trend seen in more mature markets where online shopping activity is on average the highest in November. The retail categories taking the largest share of online sales were fashion, multimedia (newspapers, books, furniture, electronics and home appliances.

Footfall now vs pre-pandemic

In November 2021, the average footfall for shopping centres and retail parks came to 411,200, marking a rise for the first time since the pandemic. This represented an increase of 9 pct compared to 2019. Although the number of shoppers reached its highest monthly figure of 443,600 in December 2021, it was still 8 pct lower than its pre-pandemic level.

“Retail footfall data indicates a fall of 17 pct on 2019 and a 15 pct increase compared to 2020. The previous year’s footfall volumes fell more sharply, averaging at 28 pct. In the second half of the year, when shopping centres were required to follow strict hygiene protocols allowing only 1 person per 15 sqm, footfall was down by around 5 pct on 2019, which suggests that the sharpest falls are already behind us,” believes Beata Kokeli, a partner and head of retail agency in Poland at Cushman & Wakefield.

Uptick to cumulative turnover

Cumulative turnover data shows that retail sales were up in December 2021 by 9 pct y-o-y, but down by 13 pct on the same month in 2019. The average turnover for the whole of 2021 grew by 5 pct compared to 2020, but was down by app. 25 pct on 2019’s level.

About C&W

Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. It is among the largest real estate services firms with approximately 50,000 employees in 400 offices and 60 countries. In 2020, it generated revenue of USD 7.8 bln from its core services of property, facilities and project management, leasing, capital markets, valuation and other services.