According to the Retail Parks and Convenience Centres Investment Market report prepared by Avison Young and the Polish Council of Shopping Centres (PRCH), with contributions from legal and financial experts – Squire Patton Boggs and Sustainable Investment Forum Poland (POLSIF), since 2020, small and medium-sized retail parks have spread rapidly. While the retail market is mature and saturated, retail parks and convenience formats have successfully carved out their niche.
Even before the pandemic, the trend towards convenience shopping was becoming clear, as evidenced by the declining popularity of large hypermarkets and the reduction of their floor space. Consumers increasingly prefer to complete their essential shopping quickly and easily. After March 2020, the demand for convenience shopping surged, driven by a growing interest in local retail options. With many restrictions in place, most consumers stayed closer to home, prompting them to explore and support local neighbourhood retailers.
Retail parks have emerged as a market response to the increasing demand for local and convenience-driven shopping. They are typically located in specified locations such as densely populated residential zones, on the way home or in the city outskirts near the main road, often adjacent to established retail developments. Their diverse tenant mix is designed to facilitate everyday shopping in a single, convenient location. Additionally, their layout, featuring individual entrances for each unit and parking directly adjacent to the stores, ensures a fast and convenient shopping experience.
Due to their distinct purpose and offering, retail parks, despite their rapid growth, do not directly compete with shopping centres. This is evidenced by the performance of shopping centres, which has returned to pre-pandemic levels. Retail parks serve a different role in the retail landscape compared to shopping centres, where visitors seek not only essential shopping but also premium brands, dining, entertainment, and leisure experiences. The differing functions, sizes, layouts, and tenant mixes of each format ensure their offers are complementary rather than competitive.
The shift in shopping habits based on this division of retail formats is becoming increasingly pronounced. This is particularly relevant in the context of retail chains’ development strategies, especially for discounters and value retailers, whose offer is present in both retail parks and shopping malls. These brands need to carefully evaluate their operating models to avoid store cannibalisation, a trend that is beginning to emerge.
Despite the increasing significance of e-commerce, over 90 percent of retail sales still occur in physical stores. Before the pandemic, online purchases accounted for just 5.6 percent of total retail sales in Poland. Following the beginning of the pandemic in March 2020, online sales surged, peaking at nearly 12 percent during lockdown periods. Since then, the share of e-commerce has stabilised, reaching 8.8 percent in July 2024 (Statistics Poland). Seasonal spikes in online sales continue to be observed around the turn of the year, particularly during events like Black Friday, Christmas, and sales promotions. The growing importance of e-commerce is influencing shopping centres in terms of omnichannel retailing, presenting various communication and branding challenges aimed at enhancing the overall shopping experience.
Retail parks focused on meeting basic shopping needs are less affected by the rising prominence of online sales. Customers visit these parks regularly, as their convenience offer encourages immediate, in-person purchases. Furthermore, the off-price and frequently changing product selections motivate spontaneous visits. This customer behaviour is exemplified by Pepco’s decision to abandon its online growth strategy after just one trial year. The off-price offer, which is central to the chain’s business model, has resulted in relatively low average transaction values, making it difficult to develop profitable online sales. Customers prefer to shop in stationery stores rather than incur delivery costs.
Over time, a synergy between retail parks and shopping centres has become increasingly apparent. Some shopping centre owners, such as EPP and Greenman, have expanded their properties not through traditional extensions but by constructing nearby retail parks. When properly commercialised, these retail parks draw in customers and enhance the overall appeal of the shopping centre, leading to an increase in total footfall. As a result, these parks now play a vital complementary role to the offerings of the shopping centres.
The development pipeline for retail parks is projected to exceed 500,000 sqm of new supply in 2025, marking a record high for newly completed space. Additionally, small convenience retail formats (below 5,000 sqm of GLA) are flourishing across the country. Is there still room for new retail parks? Major market players contend that the retail park and convenience market is far from saturation, with several years of accelerated expansion still expected for this format. However, accurately predicting the oversaturation point remains a challenge.
“At the moment, market players are aggressively acquiring as much as possible, without much thought to market saturation. The goal is to quickly secure the best assets before the retail market maturity becomes visible. As newer, modern retail parks are developed nearby, they will inevitably draw tenants away from older ones. Consequently, these older parks are expected to transition towards alternative uses, such as trampolinę parks, kindergartens, and other non-retail functions. This transformation is something we will likely witness in the coming years as the market evolves,” commented Artur Czuba, Associate Director of Investment at Avison Young.
Currently, nearly 18 million people in Poland live within a 15-minute drive of retail parks, representing 47 percent of the population who can easily access these facilities by car. This analysis includes both operational and under-construction retail parks with GLA of over 5,000 sqm. If we extend the driving time or include small convenience schemes, the impact zone of the retail park and convenience retail format expands significantly, encompassing more smaller towns and municipalities.
Expanding the retail park and convenience offered in small towns necessitates comprehensive spatial analyses, along with appropriately sized projects and tailored offerings. Small towns frequently influence surrounding rural areas, meaning the theoretical catchment area extends well beyond town boundaries. Consequently, the demographic and economic potential of a location is determined by catchment area analyses and local competitive overview, reflecting the impact power of particular retail schemes. Some small towns exhibit a notably high retail concentration index, where retail turnover surpasses the purchasing power of residents.
