Off to the shops in your slippers

Retail parks have been going through something of a golden age for some time now. “The pandemic, which we’ve had to contend with since 2020, has resulted in this format becoming the best solution to the changing needs of consumers, for whom the basic decision about where to shop is now how close the retail location is to where they live or work as well as the convenience and the quality of the goods offered,” explains Magdalena Chruściel, the retail director of Colliers in Warsaw. The situation we find ourselves in today is resulting in more demand for shopping close to home, as prices rise rapidly due to inflation. “As the cost of living increases, it is becoming crucial for many people in towns across Poland to reduce unnecessary costs, which includes travelling out to distant shopping centres,” adds Aneta Kulik, the commercialisation director of DL Invest Group. Developers have responded quickly to meet this need. “In the first half of 2022 alone, a total of 97,000 sqm of retail park space was completed, accounting for 90 pct of the total supply for the retail sector,” points out Magdalena Chruściel of Colliers, adding there’s still another 180,000 sqm of this type of space under construction, making up most of the new supply. “What’s interesting is that modern shopping centres in the form of retail parks with areas of over 5,000 sqm have even begun to appear in towns of less than 15,000 people, examples of which are the openings of the new Gama centre in Warka and Green Park in Sławno. In Q3 the opening of an Atut centre in Sucha Beskidzka is also planned,” she says. As Magdalena Chruściel notes, just as people began to shop in retail parks just before the outbreak of the pandemic, over the last few months the trend for shopping closer to home has become even stronger. “Retail parks, particularly those in smaller towns, have started to take on the role of local malls,” she observes.

Boutiques into small towns

This change in shopping habits has in turn been transforming the tenant mix in these types of centres, as both market analysts and developers can confirm as well as the brands themselves. “We are seeing a clear change in the tenant mix, with large chain brands now appearing, such as LPP. Before the pandemic they were mainly only present in shopping centres, but these days they are opening boutique stores in small town retail parks,” reveals Magdalena Chruściel. Fashion group LPP and its brands is one example. “Our interest in having local stores in smaller shopping centres has been fuelled by the changing shopping habits of our customers. There are two current phenomena taking place – in big cities we are seeing increased demand for online shopping, whereas traditional stores remain the preferred choice of shoppers in smaller towns, where retail parks are dominant,” explains Przemysław Lutkiewicz, the vice-president of the management board of LPP. “That’s why we are now giving them special attention as we expand our chain of brick-and-mortar stores, generally in terms of our younger brands, like Sinsay, Cropp and House,” he adds. Jacek Wesołowski, the managing director of Trei Real Estate Poland, has also been seeing a shift in the range of tenants, although he downplays the extent of this. “I would say that it is a gradual process whereby another group of tenants has matured enough to take the decision to enter this sector by opening their first stores in retail parks,” he suggests. “At Trei, we have for many years been working on our relationships with the large numbers of tenants who currently lease space in our centres. Often a brand that opens in one location becomes interested in another, and that’s why we have stores like Rossmann, Pepco and Kika in many of our Vendo Parks,” he explains. One never-changing expectation of tenants is that a retail park has to have a strong grocery operator. “This is something that most tenants insist is crucial for every centre to have and budget brands in particular want to be situated next to a Lidl or Biedronka store,” explains Magdalena Chruściel. Aneta Kulik of DL Invest Group adds that a grocery super-market is particularly important for retail parks developed in small towns, as these large parks are often built next to a large format grocery store that is already operating.

Closer to the consumer

Alongside the base brands, as Jacek Wesołowski of Trei refers to them, new labels are now appearing in retail parks. “Among them I could list Netto and Smyk and we’re also seeing more interest from Deichmann, which just like CCC wants to expand into retail parks,” he reveals. He also points out that over the last few years, Empik has been more enthusiastic about entering retail parks as well as the previously mentioned LLP brands such as Sinsay. “In the very near future, it will be clothing brands that are going to open in such centres. Right now, we are negotiating with a large well-known clothing chain that is also planning to make its debut in retail parks,” he reveals. He also makes the point that not long ago the first cosmetics brand appeared – DM Drogerie. Trei is also currently negotiating with a multi-segment store. “Our retail parks are evolving into regional shopping centres. We are improving what they offer with restaurants and bars, parcel lockers, ATMs and more and more often there are DIY stores,” explains Jacek Wesołowski. Aneta Kulik of DL Invest also emphasises the importance of bars and restaurants – quite often it is the F&B range that generates the footfall, especially for smaller centres in this sector. As to where such stores are being built, Magdalena Chruściel tells us that they are moving even closer to where the customer lives and works. For example, Sinsay has opened in A10 Park Żary, Retalia Grodzisk Mazowiecki, S1 Nowa Sól and Vendo Park Otwock. Cropp stores have appeared in Karuzela Puławy and S1 Nowa Sól. House is in Karuzela Puławy, S1 Nowa Sól and Retalia Grodzisk Mazowiecki; 4F is in S1 Stargard and a retail park in Braniewo. CCC, Deichmann, Empik and Vision Express are also rolling such openings.

The future of retail

Przemysław Lutkiewicz of LPP believes that smaller centres best serve customers when they have a range of goods that fulfils everyday requirements as well as that offer value for money in terms of low prices. “Today’s consumers value time and convenience more, so they care more about how easy it is to drive there and how far it is from their home or place of work. Our retail parks are close to where shoppers live and they are accessible from the street. This is another advantage that is encouraging chains to choose them as locations,” he explains. He is also convinced that retail parks represent the future of brick-and-mortar retail, which is why LPP is planning to open up to 300 stores a year in small town locations across Northern and Central Europe. For Aneta Kulik, these centres are not just excellent places for brick-and-mortar retail: “Small retail parks are also ideal for e-commerce. They are a neighbourhood concept, so they are perfect pick-up points to buy goods bought over the internet,” she explains.