Carrefour increases investment as small retailers feel the squeeze
French hypermarket chain Carrefour will invest zl. 1.7 billion ($395 million) in Poland before the end of 2001, mainly to develop its hyper- and supermarket network, said Carrefour's Agata Paszkowska said last week.
Since Carrefour entered the Polish market in 1996, the company has invested zl. 2 billion ($465 million), Paszkowska said. The average cost of building a supermarket is zl. 8 million-zl. 10 million ($1.9 million-$2.3 million). Carrefour has 12 supermarkets in Poland and plans to open 18 more super- and hypermarkets by the end of 2001.
Carrefour's direct investment up to the end of 1999 was $75 million, according to the Polish Foreign Investment Agency (PAIZ). Overall foreign investments in Poland's trade and repairs sector exceeded $3.4 billion by the end of 2000, according to PAIZ. Metro, the owner of hypermarket chains such as Praktiker, Real, M1 Trade Center and Makro Cash & Carry, is leading the field with $598 million invested. Casino, the owner of Geant, has invested $140 million, and is closely followed by hypermarket operator Auchan, with $137 million, according to PAIZ.
Polish retailers are starting to worry about the loss of business to big investors, saying they're being squeezed out of the market. Malgorzata Michalska, owner of a grocery shop located between Carrefour and E. Leclerc in northern Warsaw's Zoliborz district, said the two hypermarkets had taken away a lot of her business. "Many (former) clients now buy their groceries together with the rest of their shopping at supermarkets," Michalska said.
Miroslaw Wroblewski, the trade director of Broplast, a candy wholesaler with a 10-year market presence, has noticed a significant drop in the number of smaller retailers since hypermarkets were introduced to Poland. "Within six months of a hypermarket opening, 15% of small retailers in the immediate area are wiped out," he said.
But Wroblewski said big chains had not affected his business. "Our turnover is generated now by the other shops that have remained," he said, including the larger retailers. Though Broplast sells its products to hypermarket chains and mom-and-pop shops alike, Wroblewski said he prefers his bigger clients. "To get a zl. 200 payment from a small retailer may take a few months," he said, adding that his business is more stable and predictable when dealing with larger retailers.
