The High Street strikes back
The hypermarket sector in Poland still has some good prospects. With disposable income growing and 102 sqm of surface area per citizen, compared to 159 per citizen in the EU, there is still space for further growth. The first shopping center, which is defined by Cushman & Wakefield Healy & Baker (CWHB) as a centrally managed commercial site with at least 5,000 sqm of surface area to lease, was opened in Poland in 1993. At the moment there are 184 such retail centers with 3.9 million sqm.
Warsaw's Arkadia is the biggest shopping center in Central and Eastern Europe and was the 200th foreign hypermarket launched nationwide. Although this number is normally considered as the saturation level for countries with a similar size and population to Poland, PMR's report 'Retail Poland 2004' estimates that at least 50 new hypermarkets will be launched by the end of the decade. Although Arkadia is the biggest, Galeria Mokotów is still regarded by analysts as the best - its turnover and footfall is the highest in Poland.
The most awaited and most controversial is the Złote Tarasy project, which will be finished in 2006. The appearance of luxury shopping centers, such as Arkadia and Złote Tarasy, has pushed up rents in surrounding areas, and in Warsaw they are now at EUR 90 (zl.360) per sqm per month.
The prices, however, and the potential saturation of the market are not discouraging new players on the scene. According to a survey by CWHB the next two years will see the opening of shopping centers with almost 1.6 million sqm of commercial, entertainment and leisure space. This size is the biggest among all European countries. "Most of the key brands from overseas will end up in Poland if they are not already here," says Simon Williams, the head of Investment Donaldsons Europe.
The problem with shopping centers in Poland is that they do not differ much from each other. Złote Tarasy is an example of those that opt out of the traditional formula of 100 stores, 10 cinemas and a hypermarket on the outskirts of town. Stephen Pragnell, the president of the Polish Chamber of Shopping Centers, says city centers offer great potential for new retail outlets and vast scope for urban regeneration: "There is still a lot to be done in the city centers." Speaking at the Shopping Forum 2005, he pointed to Manufaktura in Łód, Galaxy in Szczecin, Stary Browar in Poznań, and DTC's Pasaż Wiecha development as projects that responded to this potential.
Pragnell stresses that shopping centers should be a place of fun and leisure, offering more innovative facilities, such as fishing or skiing. Simon Williams says that a concept that has found favor of late in the US, namely main-street town-center developments, could also prove popular in Poland. Such centers merge with the city character, look familiar, are pedestrian friendly and do not require extensive areas to be built. Car-parking spaces are simply located on the street front.
Shopping centers are no longer content to squat on suburban outskirts as a necessary evil. Designers are now trying to build retail centers that people use for shopping, but also as a social destination. Pragnell give one quintessentially Polish example of a shopping center under development that will have its own church. Whether the mix of praying and purchasing will work remains to be seen.
