Poland has provided a fantastic growth story in soft discount retailing over the past few years with Portugal's Jerónimo Martins the main benefactor. It owns the country's leading discounter Biedronka , which now accounts for a greater portion of Jer ó nimo's annual sales than its own Portuguese market. However, Poland's economy has been slowing down of late , and so has private consumption. A slowdown in the Polish economy - our Europe team forecast s real GDP growth to decelerate from 4.3% in 2011 to 2.5% and 2.6% in 2012 and 2013 respectively - may make it harder for Biedronka to continue to grow as strongly as it has managed to over the past few years.
|Real Private Consumption Growth (% change y-o-y) - Historic & Forecast - 2005-2016|
Biendroka accounts for more than 60% of Jer ó nimo's annual sales, and between 2007 and 2011, its annual sales grew at a compound annual rate of about 18% to EUR8.7bn. So what happens in Poland is hugely important, and the second-quarter slowdown is perhaps the first time in a few years that Poland ' s economy has raised genuine concern. We do not believe things will get easier over the second half of 2012. However, the long-term outlook for private consumption in Poland remains pretty strong, and we think this will be well reflected by the food and drink sector. From a markets point of view, Jerónimo has probably been one of the best ways to invest in the Polish consumer.