Gminas given authority to shop around
By accepting the government's amendment to the bill on commercial-space planning last week, the Sejm handed the power to decide where supermarkets and hypermarkets can and cannot be built to local gminas (districts).
Under the new law, supermarkets can only be built in gminas that have specified areas allocated for construction. The amendment specifies that in gminas of up to 20,000 citizens, shopping centers greater than 1,000 square meters are to be considered supermarkets. In gminas with 20,000 citizens and more, stores of more than 2,000 square meters will be considered supermarkets.
In light of the amended law, before a gmina can decide where to build a supermarket or hypermarket, it first has to consider the local community and workforce. Even transforming an existing building into a shopping center will first require the gmina's recommendation on how such a change will affect the labor market, transport and the need of consumers. The gmina's board will also have to consult neighboring gminas before taking final decisions.
To date, gminas have been unable to deny plans to build supermarkets or hypermarkets. As a result, hypermarkets have often been established in the centers of cities.
"Nobody is questioning the need for legal regulation, but that amendment can slow the pace of the investment process," said Lidia Deja, spokeswoman for the Geant hypermarkets, which are owned by French distributor Casino. The chain has 11 hypermarkets in Poland with a goal of 20-25 within the next few years. "One needs to think about the effects of such a slowdown; Geant hypermarkets employ tens of thousands of people," she said.
Deja said the new law has loopholes that investors find troubling: "It's unclear, for instance, who is going to be responsible for the analysis and who an investor should appeal to when his application is rejected."
Polish legislators have been trying to come up with the right bill for two years now, one that could meet the needs of both Polish small traders and Western retail chains. The amendment came more than one year after the Cabinet gave a negative assessment of the shopping center bill submitted by Solidarity Election Action (AWS) deputies in July 1998. The bill was intended to limit the expansion of hypermarkets around the country, which merchants said threatened local trade.
The government submitted an amendment to the bill on April 17, but the Sejm is still working on the 1998 shopping center bill. The bill was discussed again at its meeting last week along with the accepted and less restrictive area-planning bill. The shopping center bill was sent back to parliamentary committees for changes after AWS deputies overruled the motion to reject it.
Under the shopping center bill, gmina councils would have the power to decide whether a hypermarket can be built in their area. Such power would include stores whose shopping space exceeds 1,000 square meters, or 400 square meters if it's built on gmina-owned land in a city of fewer than 50,000 people. The bill was supported by merchants, especially their local organizations, but it was negatively assessed by the Office for Competition and Consumer Protection (UOKiK). According to the office, such regulations are not welcome, as they usually tend to limit the competition-fuelled retail market. The Cabinet described the bill as too complicated and restrictive.
However, control over the expansion of supermarkets has advocates in all parliamentary clubs. In Poland, there are 3,000 supermarkets and 250 hypermarkets, defined as such because their areas exceed 2,500 square meters. Moreover, at least nine Western hypermarket chains have expansion plans and their market shares are growing quickly.
According to research by Company Assisted, hypermarkets controlled 11% of the retail market in 1998. Today they account for 20% of total retail turnover. While Western companies have established businesses and access to capital, the Polish retail market is underfinanced and sensitive to foreign competition. About 99% of Polish stores have no more than two outlets. Some 91.8% of them contain no more than 50 square meters.
