Retail
“Sunday shopping ban will hit everyone, not only retailers and tenants. Businesses providing services to shopping centres will also need to prepare for upcoming changes; they will probably renegotiate rates and cut headcount,” says Szymon Łukasik, Head of the Retail Department at Cresa Poland.
In a couple of weeks from now, retailers will be allowed to open stores only on the first and last Sunday of a month. An almost complete ban on Sunday trading will take effect in 2020. How will it affect the retail market in Poland?
Szymon Łukasik, expert of Cresa Poland: The new regulations on trading to take effect on 1 March 2018 will have a major impact on consumer shopping habits.
In Poland, large-scale retail schemes have always been open on Sundays, except for public and church holidays. This change will interfere with the freedom of choice. If you, as a customer, believe that shopping on Sundays is against your beliefs, don’t do it.
What about those who have to work?
This is a more complex issue. It’s not just retail sector employees that work on Sundays. For many retailers, Sunday is the second busiest trading day after Saturday on which they record the highest turnover. If you take that day away from them, they will see their turnover levels drop and only partially spread over weekdays.
Polish MPs propose to exempt online retailers from the Sunday shopping ban. Will the online channel take over the traffic? Will consumer behaviour change?
In my opinion, retailers having an online presence will see their turnover rise, but the internet won’t absorb all the Sunday traffic from shopping centres. What about those who don’t like or want to or simply can’t shop online?
I remember a café operator saying at a recent conference that “a coffee that’s not drunk on a Sunday will be lost forever”.
What does it mean?
F&B businesses can go online only with part of their service. Modern shopping centres are expanding their F&B offers to attract ever more customers. Even if F&B establishments are permitted to operate on Sundays, their Sunday turnover will be much lower than that on those days when retail stores are open.
And look at outlet malls. They have a limited share in the Polish retail market, but are very popular. It is weekends that are busy trading days for outlet malls – such schemes are usually located away from city centres and customers take a long time to do shopping. Footfall levels achieved on Saturdays and Sundays tend to be even several times those on weekdays. And the internet has nothing to do with it.
Who will be hardest hit by stores closed on Sundays? Shopping centre landlords? Retailers? Service providers? Who will bear the brunt?
Everyone will feel the impact of stores being closed on Sundays. Retailers will see turnover decline. Shopping centre landlords are already bracing themselves for tenants demanding lease renegotiations due to a reduced number of trading days.
Businesses providing services to shopping centres will also have to prepare for changes. It’s likely that they will be forced to renegotiate rates and reduce headcount. Everyone will bear the consequences of the ban and it won’t be a change for the better.
Please also remember that working in a shopping centre, including on a Sunday, is an opportunity to earn some extra money for students and people needing to work outside regular business hours on weekdays. Whenever a new shopping centre opens, many new jobs are created: from 200 up to 1,500, depending on the size of a retail scheme.
Apart from that, retailers planning to enter the Polish market will have to take account of the ban, because it will be difficult to estimate projected turnover levels in this new situation.
Restaurants and entertainment facilities will be open in shopping centres on Sundays. Bakeries, stores with devotional items and souvenirs, pharmacies, flower shops and kiosks will probably also be allowed to open, but not other sectors. Will supermarkets exploit these loopholes?
Polish entrepreneurs will sooner or later find loopholes in the legislation and exploit them in line with the principle: “Everything which is not forbidden is allowed”. Bakeries, for example, will be permitted to operate on Sundays, meaning that some stores will be open because most have their own bakeries.
The pace of introducing changes is a concern to me. We know from experience that changes effected too quickly are of poor quality and detrimental in the long run, setting precedents and causing chaos. And that’s bad in business.
But let’s get back to the main point. If a cinema is open in a shopping centre on a Sunday, that’s great, you can watch a film. But restaurants, both those nearby and those within a shopping centre, will hardly benefit as cinema goers are not necessarily food court or restaurant clients. Besides, even if some cinema goers popped into restaurants in the past, now they may be put off by an empty shopping centre.
Only sophisticated and modern F&B zones, like that operating at Galeria Mokotów for several years or the recently-opened one at Arkadia, will survive Sundays with stores closed. Traditional food courts with a handful of F&B outlets, even if operated by leading and top brands, stand no chance of survival. Keeping them open on Sundays, with stores closed, means a risk of a financial loss.
How will the Sunday shopping ban affect the retail sector?
The market will probably get over the new situation, but all market participants are now entering a tough period of changes.