Poland is outpacing its original vaccination roll-out targets, resulting in a robust rebound in retail activity and promising economic prospects, said JSE-listed EPP on June 22.
With one of the lowest and consistently declining Covid-19 infection rates in the European Union (EU), a growing number of vaccinated residents, entertainment and schools that have reopened and social gatherings resumed, Poland is now returning to pre-pandemic normality.
This saw a broad opening of almost all sectors of the economy in recent weeks allowing Polish residents to travel, visit restaurants, go to the cinema or a concert, watch a game in a stadium and even, from June 26, party in a night club.
Lifting the majority of restrictions is owing to, besides others, the progress of the national vaccination programme. By June 17, 26-million Covid-19 vaccine doses had already been administered in Poland and 42% of the population had received at least one shot.
Oxford Economics has maintained its forecasts of cumulative gross domestic product growth of more than 8% for the country by the end of 2022.
As the EU’s sixth-largest economy, Poland remains one of the most stable and attractive investment markets in Europe and €172-billion in support from the EU budget and recovery fund should boost it even further in the coming years.
EPP CEO Tomasz Trzósło said the company was "pleased to see continued improvement in Poland such as its declining number of new Covid-19 cases and advanced vaccination programme, as well as increased economic activity, footfall levels and tenants’ sales”.
All of this, he added, signals a rapid recovery after the recent pandemic wave and stable future growth, allowing the Polish property company to look ahead with cautious optimism.
This cautious optimism is now also evident in the retail sector, where Polish shoppers can again enjoy almost the full range of shopping centre offerings, including food and beverage and entertainment – only bowling alleys are yet to resume operations.
Customers flocked back to EPP’s retail assets immediately after lifting the trading restrictions on May 4, returning quickly to their pre-pandemic social and economic lifestyles.
That strong rebound in retail was witnessed post each of the previous lockdown periods in the country as well, though Trzósło said this time it was “even more evident” in the footfall and sales results.
Recently conducted market research shows that, in anticipation of shopping centres reopening, Poles actually held back on spending, preferring to wait and buy goods in store.
Once again, it confirmed their preference for the physical interaction of in-store shopping, which can’t be replaced by buying online.
“It is clear that Poles chose bricks-and-mortar retail to do their shopping, which is evident in EPP’s shopping centres, where tenant turnover continues to increase more quickly than footfall and shoppers have bigger basket sizes now,” commented Trzósło.
In February, sales had already reached 99% of levels recorded in pre-pandemic February 2020 despite footfalls of 71%.
In May, sales were 113% of May 2019 levels, with the footfall rate at 82%.
May’s top-performing categories by turnover compared with May 2020 were fashion and accessories (+26%), household & appliances (+21%) and speciality goods (+9%).
Consumption in Poland is driven by low and decreasing unemployment rates, consistently rising wages and growing purchasing power. Retail sales are forecast to continue to grow quickly, by 4.9% this year and 3.3% in 2022.
The country was expected to have one of the highest European growth rates in household income and consequently consumer spending by 2030, Trzósło pointed out.
Retailers also continue to show robust demand for space in EPP’s retail portfolio. As a result, occupancy rates remain strong and stable at 95.5%.