Polish FMCG market

Polish trade affected by war

Friday, 10 February, 2023 Food From Poland 40/2023
The economic and geopolitical situation at the beginnig of 2023 is not
The global economy is slowing down. While many countries had still not managed to recover from the adverse effects of the pandemic, the outbreak of the war in Ukraine last February caused a rapid growth of raw material and energy prices on global markets. Inflation – driven by the most severe energy crisis since the 1970s – reached a record-breaking level, to which banks responded by increasing their interest rates. The Polish economy has been hit hard by the aftermath of the crisis, especially that close economic relationships used to tie it with both sides of the military conflict, e.g. in the supply of raw materials (such as sunflower oil, maize, soybean oil, rapeseed) or energy products, such as gas, petroleum and coal. The geopolitical situation affects the dynamic growth of production costs, including of energy, purchase of raw materials, packaging, or chemicals necessary in the production process, which translates into substantial increases in prices of commodities purchased from the manufacturers. The condition of Polish trade is affected, on the one hand, by the rapid growth of costs, e.g. of supply of goods to stores, maintenance of premises, labour, etc., and on the other hand – by flagging consumer demand. The inflation has made the prices skyrocket to unprecedented levels. Some products even went up by as much as 80–100%. High inflation, growing credit instalments, increased rent and payments for utilities, etc. –a negative dynamics of the salaries growth rate – bring a decrease in disposable incomes of households, due to which consumers are forced to restrict their expenses on food and necessary products, e.g. by giving up on certain goods, choosing cheaper alternatives, or purchasing products covered by promotions. An unfavourable side effect of inflation is the so-called poverty theft, i.e. shoplifting of essential foodstuffs, such as bread, butter or pasta. This proves an extremely difficult living situation of the Polish people, many of whom experience extreme poverty. International trade chains, through the scale of business, successfully protect Polish families against excessive growth of product prices on store shelves. Unfortunately, in the face of inflation, the economic and energy crisis, the unstable situation beyond our eastern border, and increased fiscal pressure, large-surface trade is afraid of deterioration of conditions for business in 2023. The industry is particularly concerned with issues related to energy and food security.

Renata Juszkiewicz President of POHiD

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