Most grocery hypermarkets in Ukraine have been developed as individual projects or by grocery retailers with a hypermarket format as a marginal business segment.
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| Why to enter this market? |
- Member of the EU
- Location between East and West
- Long industrial tradition
- Stable economy
- Stable political system
- Broad education system
- Largest country among the EU members in CEE
- Diversified industry
- Still attractive employment costs
- Attractive tax system
- Euro 2012 will speed up changes and create extra investment opportunities
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Business and economic environment
Poland, the largest of the CEE countries which are members of the EU, offers not only export investment opportunities but also an interesting domestic market with more than 38.4m consumers and a variety of industries and services. Employment costs, despite the increase in the average salary and the curbing of unemployment in recent years, are still at a relatively attractive level. A flat corporate tax rate of 19%, which Poland has offered since 2004, and recent reductions in social insurance contributions, along with major personal income tax reform, in 2009, have reduced business operating costs. The availability of a skilled workforce, ensured by the developed, but not completely reformed, education system, is increasing. In addition, many Poles who sought employment in the West after accession to the EU are now returning home.
The key investment opportunities include the metal processing industry, business process outsourcing centres, food manufacturing, the car industry, construction, aerospace, research and development, domestic appliance manufacturing, renewable energy, biotechnology and the timber industry. With a developed industrial base, Poland also offers access to a wide base of local suppliers who offer high-quality components for further use in other products. At present, an interesting investment opportunity is provided by the Euro 2012 football tournament, for which the preparations include the mass development of transport and tourist infrastructure. The former is also being developed with the use of EU funds, as this is a well-known bottleneck for sustainable growth.
The Polish economy grew by 1.7% in 2009, only to continue at the same rate with an estimated 3.8% increase in 2010. Domestic demand remained the main driver of growth. It is worthy of note that the Polish economy was one of the few in Europe not to go through a recession in the past three years, although its growth rate in 2009 did subside because of the overall economic situation. Part of the reason why GDP in Poland continued to grow even at times of crisis, was the widespread usage of EU infrastructure development funds. In contrast to the global trend, Poland also chose to introduce fiscal austerity measures instead of bailing out ailing areas of the economy.
There was a reduction in the unemployment rate in Poland from 20.6% in 2004 to 7.1% in 2008, but because of a fall in demand, both internally and in terms of foreign trade, for Polish products and services, the figure rose again, to 11% in 2009 and 11.8% in 2010.
The Polish government, partially in reaction to the 38% depreciation of the zloty between October 2008 and March 2009, started openly to discuss the possibility of introducing the Euro in Poland by 2012 and joining ERM II as soon as possible. However, this could be hard to achieve given the current situation on the capital markets and the looming recession. It must also be emphasised that Poland has strongly developed supply links with companies from western Europe and that, because the country has its own currency, local manufacturers can reduce euro prices at times of difficulty, making Euro zone entry less attractive for the government.
Social environment
Poland has a population of 38.4 million. At present, the young (under 18 years of age) still constitute a more substantial percentage than the elderly (men over 65 and women over 60) – 14.7% and 13.7% respectively. However, because of the declining population size and the increase in the average lifespan, the gap between the two age groups has been shrinking steadily for several years. Despite its multicultural past, Poland has a stable ethnic composition at present and most of its citizens are native Poles – 96.7% of the population. The largest national minorities include: Germans (0.4% of the total population), Belarusians (0.1%) and Ukrainians (0.1%). Polish is the official language of Poland.
The population is mostly Roman Catholic - 89.8%. Other large groups include the Eastern Orthodox (1.3%) and Protestant (0.3%), with 8.6% unspecified.
Infrastructure
Poland has a poorly developed infrastructure of roads, expressways, motorways, waterways and railways by western European standards. The total length of the railways in Poland is 22,314 km, which puts it in first place in Europe in terms of railway network density. The total length of motorways/expressways in Poland is 1,345 km. The country has 12 major airports, 129 smaller airports and airfields and 7 heliports. The total length of navigable rivers and canals is 3,640 km. The Polish merchant navy consists of 106 ships, but only 9 are registered in the country. Poland’s principal ports, river ports and harbours are Gdansk, Gdynia, Kolobrzeg, Szczecin, Swinoujscie, Ustka, Warsaw and Wroclaw.
At present, Poland has 830 km of motorways and 515 km of expressways. Existing plans suggest that the Polish motorway and expressway network will be 3,500 km long by the end of 2012.
Political environment
Poland is a democratic republic. Its current constitution was established in 1997. The locus of government is the Cabinet, led by the Prime Minister. The President appoints the Cabinet in accordance with the proposals of the Prime Minister, who is typically from the majority coalition in the lower house of the legislature. The president, who is elected by popular vote every 5 years, serves as the head of state. Poland’s voters elect a two-chamber parliament (the National Assembly which consists of a lower house, the Sejm, and the Senat). Poland joined NATO in 1999 and the European Union in 2004. Since its return to democracy, Poland has steadfastly pursued a policy of liberalising the economy and today stands out as one of the most successful and open examples of the transition from a command economy to a free market system.
The country will take over the presidency of the European Union in the second half of 2011, after Hungary’s six month tenure.
General data
Area: 312,685 sq km
Population: 38.4mn (2010)
Capital: Warsaw
Language: Polish
Ethnic groups: Polish 96.7%, German 0.4%, Belarusian 0.1%, Ukrainian 0.1%, others 2.7% (2002)
National boundaries: Russia 432 km, Lithuania 91 km, Belarus 605 km, Ukraine 428 km, Slovakia 420km, Czech Republic 615 km, Germany 456 km
Major economic indicators
| |
2007 |
2008 |
2009 |
2010 |
2011 |
| GDP (EUR bn) |
310.8 |
360.2 |
385 |
399.6 |
415.2 |
| Population (m) |
38.1 |
38.1 |
38.1 |
38.4 |
38.4 |
| GDP per capita (EUR) |
8154 |
9453 |
10105 |
10406 |
10812 |
| GDP (constant prices y-o-y%) |
6.7 |
5 |
1.7 |
3.8 |
3.9 |
| Exports, real, y-o-y (%) |
9.1 |
5.8 |
-5.2 |
13.15 |
|
| Imports, real, y-o-y (%) |
13.6 |
6.2 |
-6.2 |
14.3 |
|
| CPI (average, y-o-y%) |
2.5 |
3.3 |
5 |
2.6 |
|
| Central bank reference rate |
5 |
5 |
3.25 |
5 |
|
| Monthly wage, nominal (EUR) |
762 |
904 |
744 |
940 |
|
| Unemployment rate (%) |
9.6 |
7.1 |
11 |
11.8 |
|
| Budget balance |
-2 |
-5.5 |
-3.2 |
-2.6 |
|
| Net FDI (EUR bn) |
16.7 |
11 |
7 |
10,0 |
|
| FDI% GDP |
5.4 |
3 |
1.8 |
2.4 |
|
| FX reserves (EUR bn) |
44.7 |
44.1 |
48.6 |
63.1 |
|
| Exchange rate to USD AVG |
2.76 |
2.39 |
3.35 |
2.93 |
2.83 |
| Exchange rate to EUR AVG |
3.78 |
3.52 |
4.34 |
3.85 |
3.97 |
Last update: Q1 2011
Useful data
Currency: zloty (PLN)
Exchange rate: (21.03.2011): PLN 1 = EUR 0.25
Time zone: GMT +1
Area code: +48
If you would like to find out more on the Polish market opportunities please do not hesitate to contact us directly:
phone: (48 12) 292 22 50
fax (48 12) 292 22 99
e-mail: info@pmrconsulting.com
PMR Business Solutions in Poland
Market reports Poland
To purchase or find detailed information on PMR Publications reports covering the general economy, construction, retail, pharmaceutical, and ICT sectors in Poland.
If you are looking for greater detail trust our research and consulting divisions to carry out projects tailored to your business needs.
Consulting in Poland
PMR Consulting offers a wide range of consulting services in Central and Eastern Europe for foreign companies interested in the region. The typical projects include: competitive intelligence, sourcing, strategic advisory, consulting at foreign direct investments and mergers & acquisitions.
Market research in Poland
PMR Research offers a full array of qualitative and quantitative research methodologies, providing services such as customer satisfaction studies, brand awareness and brand image research, distribution and competition studies, segmentation and sector analyses.
Case studies for Poland
Albania | Bosnia & Herzegovina | Belarus | Bulgaria | Croatia | Czech Republic | Estonia | Hungary | Latvia | Lithuania | Macedonia | Montenegro | Poland | Romania | Russia | Serbia | Slovakia | Slovenia | Turkey | Ukraine
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