Franchise or you’re gone. The problem of small Polish trade is also the PESEL number

More and more independent stores offering basic necessities (food – FMCG) decide to join franchise networks. In 2023, there were almost 55 thousand grocery stores on the market, which is 2 percent less than in the previous year.

– Franchising is becoming an attractive solution, offering not only marketing support, but also better trading conditions. The growth in the number of stores such as Żabka, which operates in a franchise model, is a perfect example of this. Last year, Żabka, one of the largest franchise chains in Poland, significantly contributed to the growth in the number of small-format chain stores – commented Michał Maksymiec, Director of Cooperation with Retail Chains at Consumer Panel Services GfK.

This is not a new trend. We analyzed it in 2022.

The disappearance of small shops

– What we have been noticing for a good few years now is the decreasing number of individual stores. We are dealing with the growing importance of discount stores, and retail chains, i.e. small stores, but under franchises, are also growing. On the other hand, the importance and role of hypermarkets, which reigned supreme a dozen or so years ago, is decreasing – noted Piotr Palutkiewicz, vice president of the Warsaw Enterprise Institute.

The declining popularity of super- and hypermarkets is primarily the result of changing shopping habits. – Previously, the model was frequent but small purchases: Poles would go to the store next door and buy more as needed. For some time now, they have been making large purchases in discount stores; often on Saturdays, because then they have time, and stores additionally encourage shopping on that day – said Palutkiewicz.

It’s harder on the market for a single person

Maciej Kroenke, partner at Strategy&Poland, noted that although everyone has been predicting the death of retail for years, it has not happened.

– These small shops are changing in some way, evolving, adapting. Networked trade is developing very quickly and is drawing in existing retail outlets – he said.

It is no longer about the fact that in every newly built housing estate, Żabka appears at the same time as the first tenants move in. Many stores that existed a dozen or so years ago are still operating in their location; they have not even changed their interior design, but they are no longer called “Sklep u Ewy”, but greet with the Lewiatan, ABC or Groszek chain banners. This is happening not only in the food trade: in smaller towns, there are 670 cosmetic stores associated with the Drogerie Laboo chain. For comparison – the well-known and advertised Hebe drugstore chain offers shopping in just over 200 stores.

Who will take over the job when Dad retires?

Our interviewees pointed out that the reason for the disappearance of small shops is also, generally speaking, the PESEL. Whoever founded “Watermeaters and Fruits” in the early 90s is now approaching retirement. Children and grandchildren, who have watched their parents get up early in the morning, go to the stock exchange, spend a dozen or so hours on their feet and cannot go on vacation because they have to look after the business and the money from it is so-so, do not necessarily want to take over the business after them.

According to Piotr Palutkiewicz, the ban on Sunday trading has also harmed small trade. The initiators of the ban argued that it would be the other way around, that local shops would gain, but it ended with Poles buying more on Saturdays in discount stores.

Can the legislator do anything to support individual retailers? – Transparent rules for running a business, low tax burdens, easy settlements, that is, what all entrepreneurs wish for – listed Palutkiewicz.