Poles don’t buy ‘white bread for the freezer’: expert, on Tesco exit

“Poles prefer local convenience stores for daily fresh produce and bread, rather than going to an edge of town supermarket for white bread for the freezer” Michael Dembinski, Senior advisor to the British Polish Chamber of Commerce tells PolandIN.

“The convenience store or ‘sklep osiedlowy’ (translation: housing estate shop) is still very popular with Polish shoppers,” Mr Dembiński said, which is a reason proffered for the demise of Tesco’s “big box” model of shopping in Poland, which became so much of a drag on the UK group’s profits. So much so that they sold off 301 of their remaining 320 stores to the Danish Salling group for a fee analysts say is below book price - PLN 800 mln (EUR 180 mln) so around EUR 6,000 per shop.

Salling’s “Netto” chain, which is strongest in the North and West of Poland and absent in the Greater Warsaw area, or in Tesco’s main heartland of Southern Poland, aims to bring 301 of the Tesco stores under its banner within eighteen months. The deal needs local regulatory approval, this they hope to obtain before the end of 2020. Netto are ambitiously competing in the price-conscious section of the supermarket segment occupied by Kaufland, according to the expert.

Unlike in the UK, where the retailer has grown its Tesco24 brand of smaller shops, the Polish chain is much more associated with edge-of-town “big box stores”. This may be a reason for Tesco's failure to turn a substantial profit in recent years, as discounters like Lidl, Biedronka and Carrefour24 have moved nearer to customers.

However, Mr Dembinski praised the outgoing retailer for its corporate social responsibility efforts in Poland and its innovativeness.

Other UK retailers which have not caught on anywhere like Tesco include BHS, Top Shop, Mothercare and Dixons. The UK success model for Mr Dembinski is Kingfisher, who operate the Castorama chain, once French-owned, in Poland, which he says understands its customer well. They compete head to head with Leroy Merlin and Obi in Poland’s DIYstore market.

To watch the full interview, click here.