ESM: European Supermarket Magazine is proud to launch 'The A-Z of Retail', a new subscriber-only series that offers a deep analysis of the retailers, suppliers and individuals making the news each week. Today: P is for Piotr i Paweł.
Once dubbed the 'Waitrose of Poland', popular retailer Piotr i Paweł is close to entering a new phase in its development.
After 27 years in business, Piotr i Paweł is in the final stages of choosing a 'strategic investor', which will either take a majority stake or take over the business completely, according to Polish trade publication Wiadomości Handlowe.
An announcement is expected 'very soon', the company has confirmed.
Business owners and brothers Piotr and Paweł Woś said that “this process resulted in the submission of specific offers by investors interested in investing in the network. In the near future, an investor will be selected that will effectively safeguard competitiveness and the possibility of further development of the company on the market."
Interested parties are said to include businesses boasting current operations in Poland, however, the company has confirmed that the retailer has also piqued interest overseas.
French retail giant Carrefour is thought to be among the potential suitors, having just recently opened its new ‘Carrefour Pro’ format, which the retailer claims is one of the most technologically-advanced stores in Poland.
The French retailer is looking to increase its number of ‘premium’ supermarkets, and with the its recent exit from Slovakia, it might be keen to double down in a market in which it has a pronounced presence.
Network Scale
Should it remain an independent business, Piotr i Paweł will be seeking to compensate for its lack of scale, with the business currently boasting 148 stores and franchises across the country.
“Companies with around 1% market share have significantly worse purchasing conditions and need a larger scale of purchase, a larger scale of operations,” Robert Krzak, board member at Piotr i Paweł told Rynek Spożywczy magazine. “We are looking to improve purchasing conditions so that we can compete more directly."
Poland’s retail sector is notoriously competitive with a smorgasbord of international retailers setting up shop across the country.
With a population of over 38 million people, the country remains an important market in the region, especially with growing disposable incomes and returning inflation, according to the most recent report by Euromonitor International.
Jerónimo Martins-owned Biedronka is the current market leader, but the market is crowded with other international players from Carrefour and Tesco, to Auchan, Kaufland, Lidl and Aldi all vying for a slice of the pie.
Too Many Retailers
The country arguably has the widest selection of international grocers of any European country, and Piotr i Paweł’s Krzak believes that the system is set for a shake up.
“Poland is the most competitive market in Europe,” Krzak told ESM last year. “It’s everybody against everybody. There are probably one or two too many retailers in the supermarket and hypermarket sectors. We will see consolidation. I cannot see the market remaining the way it is for much longer."
A government ban on Sunday shopping may also tighten things. The country’s Catholic conservative government is set to gradually impose the ban that will force retailers to close shop for two Sundays a month from 2018 and for all but a few exceptions in 2020.
This regulation appears to be primarily targeting large international retailers. However, homegrown brands such as Piotr i Paweł are left with uncertainty as to whether the regulation applies to them in the same way.
Strong Position
Piotr i Paweł has always positioned itself at a slightly higher level than mainstream operators in the country. This positioning, Krzak told ESM, enables the group is to maintain profitability, even when it shares a location with Auchan or Lidl stores.
“These stores are also able to compete, as the Piotr i Paweł shopper is looking for a different level of quality,” Krzak said. “The typical Polish consumer conducts his or her shopping in eight different stores, but we have shoppers that spend 100% of their budget in Piotr i Paweł.”
By bolstering its signature strengths, such as fresh food and private labels, while also enhancing its technological capabilities, Piotr i Paweł should be able to take advantage of a Polish consumer base that is willing to spend more, and looking for more quality produce.
All will depend on the nature of the investment the business secures.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Kevin Duggan. Click subscribe to sign up to ESM: The European Supermarket Magazine.
