New legislation enforced from September of this year restricts the establishment of shops that are larger than 400 meters squared. According to Adam Szejnfeld from the Civic Platform (PO), the new legislation is a legal blunder.
Dziennik reports the Constitutional Tribunal is set to rule on the matter within the next couple of months. The legislation is deemed in breach of the constitution by restricting trade.
Szejnfeld is of the opinion the wait for a ruling from the Tribunal is too long in coming, especially since the legislation is a legal blunder. According to the PO senator, the legislation was meant to protect the small business trader, but its outcome will achieve the opposite. Marek Sawicki, senator for the PSL (Peasants’ Party), agrees, stating the party is looking for alternative ways of dealing with the “hypermarket” question.
There are currently 290 large hypermarkets with a shop area of more than 400 square meters operating in Poland. There are 1,300 supermarkets, 1,610 discount stores and 115,000 small privately owned stores. The statute was passed to protect the small shop owner from a further influx of large supermarkets.
Analysts however fear the opposite will happen. If foreign hypermarket branches will are not permitted to invest in developing more large scale supermarkets, they will simply buy out locally owned businesses, either outright or through franchise options. Analysts predict it is only a matter of time for large foreign-owned conglomerates to buy up traditionally local shops in housing estates, residential areas and small towns.
The French-owned Carrefour has already commenced its take-over activities, offering independent grocers franchising licenses. Tesco has similar plans. The British-owned supermarket chain will open 5 new Tesco Express supermarkets by February that will not be larger than 400 square meters.
Both companies want to enter the shopping regions of residential estates traditionally run by local small store owners. Szenfeld points out the problem will be more evident in the years to come. According to the senator, if further large conglomerates enter the market, overtaking independently owned shops, the unequal competition will destroy the traditional small shop owner. PO does not want this to happen.