Poles furnish their homes

Citation

(2008), "Poles furnish their homes", International Journal of Retail & Distribution Management, Vol. 36 No. 9. https://doi.org/10.1108/ijrdm.2008.08936iab.005

Poles furnish their homes

Article Type: Retail reports From: International Journal of Retail & Distribution Management, Volume 36, Issue 9

The furniture and home furnishings industry is enjoying prosperous times in Poland. Polish consumers attach more significance to their homes, and - as a consequence - show growing interest in furniture and other home furnishings. Although many specialist chains have been emerging on the market, the sharpest growths of furnishings sales are recorded by DIY stores.

According to PMR, sales of home furnishings and interior decoration products rose by 18 per cent, to PLN 16.5bn (€4.4bn), in 2007. Further rapid growth of the residential construction sector, home renovations and the steadily improving incomes of Poles will continue to be the main drivers of the sales. This makes PMR forecast that between 2008 and 2010 the turnovers recorded in the Polish furniture and home furnishings market will be rising at the rate of more than 15 per cent annually (Figure 5).

Figure 5 Polish home furnishings market value (PLN bn) and its growth (per cent), 2006-2007

One of the factors contributing to the strong market conditions is the dynamic growth of pay levels (observable for some 24 months), which fuels optimism and increases the propensity to buy. Higher remunerations and financial surpluses in household budgets make buyers more willing to purchase goods which improve the living standards, rather than only consumer staples. Polish consumers start to buy the needed furnishings and equipment for their long-neglected homes, many of which need major repairs.

Poles build, renovate, furnish

As the financial standing of households improves, more customers can afford to exchange their old furniture and household equipment. This, coupled with an unprecedented rise in the number of houses bought and home completions (16 per cent more than in 2006; 134,000 in 2007), boosts the demand for finishing products, household equipment and interior decoration items.

Poles are also becoming more aware of what their homes look. They start to pay more attention to interior decoration. Numerous TV programmes and magazines on home design, as well as trends in other countries, encourage consumers to search for modern and trendy products - furniture, but also porcelain or home textiles - with original design and colours. Especially, when buying furniture, consumers focus not only on the price and functionality but also the quality, comfort and attractive design.

… and chains expand

The Polish home furnishings market is heavily fragmented, with independent specialist stores generating a significant portion of total sales. PMR estimates that in 2007 this type of stores held 40 per cent share in the market (Figure 6).

Figure 6 Selected home furnishing chains by number of stores^a in Poland, 2007

However, the largest increase in sales of home furnishings products (33 per cent relative to 2006) was recorded in the DIY segment.

PMR expects the dominant role of individual stores to be gradually decreasing over the coming years, in the first place to the benefit of specialist chains and DIY stores, which are steadily expanding their ranges of finishing and interior decoration products. Moreover, the geographical expansion of chains already operating in the market, as well as the emergence of new players (specialist and DIY), will improve the availability of professional and newest home furnishings products to larger groups of customers. This, in turn, should translate into higher turnovers of these two channels and gradual increase of their market shares.

Besides IKEA, Jysk, Duka, Rosenthal, or Carre Blanc, which are already well-known brands to Polish consumers, other Polish and foreign players are expected to expand their presence in Poland (e.g. Hoft, Villeroy & Boch, Villa Italia, Alno-Kuchnie, Home Concept Store, Decorador, BoConcept, This & That, or Nanu-Nana). Plans of launching the first stores in Poland have also been announced by Spain’s Zara Home, Ireland’s Heatons, or Denmark’s Ilva (Figure 7).

Figure 7 Selected interior decorating chains of foreign origin in Poland, 2008

Still, traditional stores will never be entirely driven out of business. The ones that survived the period of transformation and adapted to the market needs are the main place to shop for equipment and decoration materials for inhabitants of small towns and villages. Thus, appearance of one or two modern chain stores there should not undermine their position.

Patrycja Ciosek, Retail Analyst, e-mail: patrycja.ciosek@pmrpublications.com