1. High Street Retailing - July 2010
”Fashion is architecture:
It is a matter of proportions.”
Coco Chanel
Can Poland cut it?

2. 2 On Point • High Street Retailing • July 2010
Polish High Street Retail: Evolution or Revolution?
High street retailing has undergone an evolution since 1995, in line This report examines the high street retailing in major Polish cities of
with wider changes to the retail picture in Poland, albeit much slower Warsaw, Kraków, Wrocław, Poznań, Tri-City, Katowice and Łódź.
and to a lesser extent. Renowned national and international brands, The following central parts of the cities were included in the
cafes and restaurants have all populated city centres, replacing research:
reminders from the Communist era. Luxury, high-end brands in
• Warsaw: Marszałkowska, Nowy Świat, Three Crosses Square
particular have a preference for high street locations over regular
(Plac Trzech Krzyży), Chmielna, Mokotowska;
shopping centres reflecting their strategy on home markets of Italy,
• Kraków: Old Town Square (Rynek), Grodzka, Floriańska;
France and Germany.
• Wrocław: Old Town Square (Rynek), Świdnicka, Oławska,
There are certain areas of Polish city centres which are natural retail Kiełbaśnicza;
destinations featuring high pedestrian flow. These are typically • Poznań: Old Town Square (Rynek), Paderewskiego, Półwiejska;
areas in a close proximity to the main touristic attractions of the • Gdynia/ Tri-City: Świętojańska;
cities’ such as Main Square (Rynek) in Kraków, Wrocław, Poznań or • Łódź: Piotrkowska;
Royal Tract (Krakowskie Przedmieście Street - Nowy Świat Street) • Katowice: Stawowa, 3 Maja, Dworcowa, Dyrekcyjna, Św. Jana,
in Warsaw. Also the vicinities of major transportation hubs defines Staromiejska, Szewczyka Square, Młyńska.
an interesting and natural high street retail destination, which is
most pronounced in Katowice with retail located in the area of the City differentials
main train station (PKP). Revitalisation and re-development of old,
The field research undertaken allowed us to determine the retail
neglected central parts of the cities’ is another incentive for retailers
mixes on each of the main street included in the report, high street
to open in downtown areas. Again Katowice can be referred to as an
retail mixes on a city level as well as an aggregate retail mix for
example with Dworcowa and Dyrekcyjna streets clearly gaining on
Poland.
importance following the refurbishment of the old historic Monopol
hotel, and are likely to attract more high-end retailers in the future. The „clothing, footwear & accessories” category dominates retail
mixes on all the markets with shares between 21% and 35% of the
total number of high street stores on a given market. On average,
this retail category accounts for 30% of the total number of unit
shops on the Polish high street. The clothing, footwear and
accessories category is best represented in Warsaw (35%), Poznań
(34%), Kraków (32%) and Katowice (32%) and Wrocław with 21%
seems relatively underrepresented in this respect.
Numerous fashion boutiques are outlet stores, which is particularly
pronounced for Chmielna street in Warsaw, Piotrkowska street in
Łódź, and to a lesser extent, Świętojańska street in Gdynia.
Interestingly, luxury high-end brands tend to form clusters. This is
visible in Warsaw around Three Crosses Square, Main Square and
Grodzka street in Kraków, on Paderewskiego street in Poznań and
aforementioned Dworcowa and Dyrekcyjna streets in Katowice.
Wrocław (31%), Kraków (29%) and Poznań (29%) have an
extensive selection of cafes, restaurants, bars and pubs, with 47,
82 and 54 units operating on these markets respectively. The lowest
Warsaw, Three Crosses Square share of this category is registered on Świętojańska street in Gdynia
(10% of units) and in downtown Katowice (11%).

3. On Point • High Street Retailing • July 2010 3
Świętojańska street in Gdynia is dominated by service operators Capturing power and attractiveness of high streets varies greatly
(nearly 24% of units), of which the main occupiers are banks and between cities. Often only a short stretch of the street
providers of financial services (11%). In addition, also Piotrkowska enjoys retailer demand. This is the case of Marszałkowska street in
street in Łódź (23%) and the Wrocław high street area (22%) are Warsaw where popular mid-market brands such as H&M, C&A,
home to numerous service units. Reserved, M&S, Mexx, Esprit are located on ground floors of
department stores of Wars, Sawa and Junior. The remaining part of
Świdnicka / Oławska street and Main Square in Wrocław (15%) and
this street is much less appealing to retailers. A similar situation is in
Piotrkowska street in Łódź (12%) are preferable locations for banks.
Kraków, where particularly attractive to retailers is a 150 metre
The smallest representation of banks is registered in Warsaw and
stretch of Grodzka street neighbouring the Main Square.
Kraków (approximately 2% each).
Conversely, the high street retail in Katowice is far more balanced
Unit shops broken down by retail categories and spread across Stawowa, 3 Maja, Dworcowa, Dyrekcyjna, Św.
Household goods and accessories 7% 8% Jana and Staromiejska streets.
Clothing, footwear and accessories 7%
Gastronomy 5%
Banks and financial services
4% 30%
Services
Groceries 9%
Vacant units
Health and beauty
8%
Other
21%
Source: Jones Lang LaSalle, May 2010
Is vacancy a problem?
The vacancy rate as defined as the number of unoccupied units
compared to the total number of retail units on the high streets is
currently at approximately 5%. Łódź (18), Warsaw (17), Katowice
(17) and Gdynia (16) feature the highest vacancies while only two
empty unit shops were identified in Poznań. There are clearly more
vacant units on Polish high streets now than two years ago – a clear Kraków, ul. Grodzka
consequence of the economic slowdown and retailers retrenching in
2009 rather than expanding. Notably, the bankruptcy of Galeria
Centrum brought about fundamental changes on the retail scene. Kraków and Warsaw: leaders in Poland but trailing in
However, the slowdown also created room for new tenants to arrive Europe
in city centres, such as Marks&Spencer and TK Maxx in Warsaw. Attractiveness of high street area differs significantly between
Vacancy rate (%) and number of empty unit shops particular cities and, most notably, areas of the cities. This is clearly
reflected in rental levels, as shown on the following graph. The
Katowice 17 units
highest prime rents are achievable in Kraków (€85-€95/ sq m /
Łódź 18 units
month), where high street retailing is most developed, and in
Wrocław 9 units
Warsaw (€75-€90). Łódź (€25-€30/ sq m/ month) and Gdynia (€35-
Gdynia 16 units
€40) command the lowest rental levels, being a function of smaller
Warsaw 17 units
retailer demand for high street units on these two markets.
Krakow 10 units
Poznań 2 units
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%
Source: Jones Lang LaSalle, Maj 2010

4. 4 On Point • High Street Retailing • July 2010
Prime high street rents (€ / sq m / month) For the majority of the survey respondents the main Polish cities
Łódź
were focal points of interest in this respect with 88% of them active
Gdynia
in these cities. One third of the retailers who responded to the
survey have opened their boutiques also in cities sized 100 000 –
Katowice
400 000 residents, and 25% of them have entered cities smaller
Poznań
than 100 000 people.
Wrocław
Warsaw
High Street Positives
Kraków
According to the survey results, unit shops on the high street do not
€0 € 20 € 40 € 60 € 80 € 100
offer direct competition to the stores in regular shopping centres.
Source: Jones Lang LaSalle, May 2010 Conversely, they are seen as an additional sales and distribution
channel. Moreover, incentives and reasons for opening a high street
For comparison, prime rents in West-European cities range from store are completely different from those underlying decisions to
€310/ sq m/ month in Munich, €270 in Frankfurt, €220 in Madrid, up enter a particular shopping centre. Retailers choose locations in the
to €625 in Paris and €650 in London. high streets for several reasons, with the most important being:
Also prime rents in the CEE capitals are above that in Poland, e.g. • enhancement of brand awareness (marketing tool);
in Budapest prime rents on Vaci Utca street are €120/ sq m/ month, • capturing of new target group of customers;
while in Prague on Parizska street they stand at €150. • lack of a properly positioned shopping centre matching the profile
of a given retailer.
Prime high street rents (€ / sq m/ month ) in major European cities Other reasons behind opening a high street shop are lower rents
compared to the shopping centres, lower personal costs resulting
Londyn
from shorter opening hours, strategy of a mother company regarding
Paryż
Monachium high street locations, high footfall figures in the high streets, and last
Frankfurt/M but not least, the lack of interesting offers in the target shopping
Mediolan
Madryt centres.
Moskwa
Barcelona Incentives to open a high street store
Amsterdam
Praga Brand awareness enhancement
Budapeszt
Kraków
Warsaw Targeting new customer groups
0 100 200 300 400 500 600 700
Source: Jones Lang LaSalle, Q1 2010 Lack of appropriate
Other
Retailers’ perspective
0% 10% 20% 30% 40% 50%
Other:
In order for our research to be as comprehensive as possible, Jones
• Rents lower than in shopping centres
Lang LaSalle carried out a survey amongst retailers who operate
• Lower labour costs
high street shops in Poland. We questioned 60 retailers
• Flagship on high street – brand
representing various categories to reflect the realistic profile of high
• Lack of sufficient offers in existing shopping centres
street retail in Poland.
• High footfall figures
Source: Jones Lang LaSalle, Survey among retailers, April – May 2010

5. On Point • High Street Retailing • July 2010 5
High Street Negatives Relation between turnovers per sq m on the high street and
in shopping centres
Surveyed retailers are of the view that the expansion on high streets
Turnovers on the high street:
is associated with a number of constraints. These include:
12%
represent less than 50% of 21%
• insufficient critical mass of high street retailing resulting from turnover per sq m in a shopping
underrepresentation of quality brands in these areas of cities; centre
are lower by 21-50% per sq m
• lack of unit shops meeting occupiers’ requirements; the need for than in a shopping centre
serious capital investment to up-grade the unit and its frontage; are lower up to 20% per sq m
• expected lower footfall than in shopping centres; than in a shopping centre 33%
• unsatisfactory level of turnover; represent more than 20% of
turnover per sq m in a shopping
• too high rents on high streets; centre 33%
• higher operational costs e.g. increased security;
• low number of or zero parking spaces; Source: Jones Lang LaSalle, Survey among retailers, April – May 2010
• limited influence on immediate neighbourhood;
• expansion strategy of some companies not allowing to open more Prime high street rents are similar to that in best performing
than one unit shop per city. shopping centres on a given market. This view is represented by
42% of respondents. Another 39% of retailers claim that rents on
High streets v. shopping centres premier retail streets are below that achievable in shopping centres;
this presumably applies to the stores on the market in Łódź, Gdynia,
Reliable comparison of rents and turnovers achievable on high Katowice and Świdnicka street in Wrocław. The smallest group of
streets and in shopping centres is extremely difficult. This is retailers are of the view that the high street rents are above that in
because of a relatively small group of retailers trading in the high retail galleries, and this opinion is likely to be expressed by
street area and the shopping centres on the given market, diversity occupiers in Warsaw and Kraków.
of premier retail streets in Poland and specifics of retailers.
Relation between rents per sq m on the high street and
Our research proves that generally higher sales per sq m are in shopping centres
generated in shopping centres - 79% of the respondents claim so.
However, 21% of the retailers surveyed express the contrary opinion Rents on high street are:
8%
and these are likely to be retailers trading on best high streets of 0%
lower than in a shopping
11%
Warsaw and Kraków. It means that 21% of questioned retailers centre of good quality
achieve higher turnovers per sq m on the premier retail streets, on a comparable level 39%
despite the fact that shopping centres have longer opening hours, higher up to 10%
more convenient access and parking facilities, and pedestrian flow
higher by 11%-20%
is higher and more balanced throughout the year.
higher by 21%-30%
Turnovers of stores trading in city centres are somewhat affected by
42%
the seasonality factor, peaking off over the Spring/ Summer time.
However, this effect is not as dramatic as one may think. Potentially Source: Jones Lang LaSalle, Survey among retailers, April – May 2010
lower sales over the Winter time e.g. from fashion retailers resulting
from less tourists shopping are compensated through sales of Our research clearly demonstrates that unit shops do not offer direct
merchandise of higher value. competition to the stores located in shopping centres, but are
additional sales and distribution channels. Through a proper
marketing of premier retail streets in Poland, and creating a trend for
high streets amongst occupiers, landlords and shoppers, it is – in
our view – possible to increase retail sales in Poland. This is proved
by observations from survey respondents. 78% of the retailers

6. 6 On Point • High Street Retailing • July 2010
surveyed did not register a drop in turnover levels in the shopping Our experience is that although the high street rents are
higher, the turnovers per square meter are higher too…
centre stores following the opening of a high street store on a given
market. Moreover, only 31% of respondents were forced to close ” We are present to develop inhigh street in Krakowhigh street
plan to continue
on the main
this direction, since
and we
their store on the high street after opening in a shopping centre in locations is what our Italian and German business partners
the same city, and nearly 70% have successfully continued activity expect. They simply associate the prestige of a brand not with
in both of the retail formats. a shopping centre, but with a high street, namely Grodzka
Street in Krakow, which is a widely recognisable street.
What can be done to raise retail sales, increase turnovers and When looking for an appropriate location we take into
consideration a blend of factors such as the prestige, the
improve the image of Polish high streets among customers? Each of exposure and the width of a shop window, the technical
the city centres is unique in its character but they all feature high condition of a shop and its adaptation possibilities. In town
pedestrian flows. Revitalisation of downtown areas would certainly centres, shop units are often located in old, historic buildings,
thus all changes must go through many procedures and
increase the dwell time of customers in the city centres, at the same
approvals from a heritage conservator. Even a simple
time raising the profile of high street retailing. In order to achieve this logotype over a shop entrance may grow to a problem.
aim, several steps should be undertaken whereby a support from Speaking about problems with securing a high street location,
local authorities plays a key role. According to the feedback from a strictly limited supply is one of these. Let’s take Krakow as
high street occupiers, the most important areas for improvement an example; our interest is restricted to Grodzka Street, and
to be precise, only its 100 m long stretch. This requires from
are:
us a constant monitoring of places where we want to be.
• lack of parking facilities, the need for well accessible parking Insufficient number of parking spaces and zones with
restricted parking are also problematic. The development of
spaces in the vicinity/ at the rear of the premier retail streets; widely available parking areas would boost sales and raise
• improvement of technical conditions of buildings along central competitiveness of high street retail.
retail streets, refurbishment of neglected facades; However, the fundamental incentive to enhance the image of
• classification of buildings’ ownership status, which currently high streets is the improvement of technical condition of
disables applying a consistent leasing policy. buildings and renovation of facades. What is also
discouraging in respect of a high street shops is the lack of
control over neighbourhood, which is typically one of the
The current situation whereby city centres are often quadrants with competences of shopping centre managers.
old neglected buildings and facades, where next to a high-end Our experience shows that the high street rents are up to 20%
boutique with luxury apparels there are “kebab” bars, should be above those in the shopping malls. We also register a higher
changed. Let’s take an initiative. An interesting example of the turnover per square meter on the high street despite the fact
that shopping centres have longer trading hours, easier
initiative, albeit abandoned, is Piotrkowska street in Łódź (currently access and higher and more stable footfall figures.”
a walking passage), where local retailers intended to revert the car
traffic into this street. Let’s create a fashion for high street shopping. Iwona Kasprzyk, Mirage*
Let’s make use of a downtown pedestrian flow potential. Let’s keep * Brands under Mirage’s umbrella: Warsaw: Paul & Shark, Marina Rinaldi, Katowice:
and entertain people in city centres with shopping and gastronomy. Marc Cain, Marina Rinaldi, Mirage – multibrand store (Furla, Dolce & Gabana,
Richmond, Francesco Biasia etc.), Kraków: Max Mara, Marina Rinaldi, Paul & Shark,
Escada.
Warsaw, Nowy Świat

7. On Point • High Street Retailing • July 2010 7
Conclusion
High street locations are prestigious and Italian brands are
City centres and main, centrally located streets set out on p. 2 of accustomed to their stores being right there...
this report, are natural retail destinations. This is where the ”The expansion of our company is via shopping centres as
well as high street shops. We have decided to open in
natural pedestrian flow peaks.
Warsaw, Krakow, Poznan, Katowice and Wrocław, because
high streets locations in these cities are prestigious, and
Shopping centres, most notably those in out-of-town locations, Italian brands are accustomed to their stores being right
there…
are struggling for customers; they also have to ensure a good
connectivity with residential districts/ catchment area and City centre retailing is currently undergoing changes, which
are often not to our benefit. There is a clear shortage of
availability of public transportation means.
downtown places associated with fashion retailing. A large
portion of Polish main streets have been dominated by banks,
Downtown areas have all the attributes mentioned above. They mobile phone operators, gastronomy concepts of all kinds,
and are therefore not particularly appealing to us.
offer a unique, and most importantly natural retail potential
which should be promoted and built upon. Among typical problems with a search for an interesting high
street location are poor quality of neighbouring stores, lack
of parking possibilities and complicated legal status of the
Polish city centres should be local focal points drawing premises, often too difficult for us to accept.
customers by a wide retail and catering offer similarly to what is However, Italian brands are accustomed to high street
observed in the major cities of UK, Italy, Germany and France. locations being home to high-end brands. Stores of luxury
retailers operate on the high streets of Milan, Paris or
London. Shopping centres are simply not the target location
The enhancement of the high street areas would also raise
for brands such as Max Mara, Versace or Armani. Our
competitiveness of the Polish cities in a race for new, strategic Italian partners aspire to open flagship stores on up-market
investors representing the business process outsourcing/ shared positioned stretches of city centre streets.
services centres (BPO/ SSC) sector. It is not seldom that the We are looking for units in areas already established as
macro-location is assessed by a potential investor based on the fashion clusters with some critical mass. We believe that
main streets in biggest cities such as Nowy Świat St. in
quality of living soft factor, which is correlated to how Polish high
Warsaw, Paderewskiego St. in Poznan, Dyrekcyjna /
streets look. Dworcowa St. in Katowice, Grodzka St. and Main Market
Square in Krakow will develop in this direction.
In smaller cities, which still lack properly positioned
shopping centres, we are opening our stores in retail clusters,
where the city life is. These usually tend to be market squares,
main pedestrian routes and high streets.
If Polish high streets are to gain on representativeness, this
shall be based on a long term strategy, included putting in
place necessary infrastructure, especially parking places.
This is once of the main challenges for retailers as well as
their customers.”
Angelika Pranke, R&D Poland/ OWL International/ TRS Polska*
* Brands under the umbrella: Max Mara, Marella, Pennyblack, Tru Trussardi, Liu Jo,
Patrizia Pepe, Armani Jeans, Pinko, Versace Jeans, Furla, Francesco Biasia, Ice
Iceberg.
Rome, Via Condotti

8. 8 On Point • High Street Retailing • July 2010
We are searching for an interesting concept to draw H&M expansion plans are not specified as to the number of new
customers to city centres and offer them add-on value, a openings in the future. Our ambition is to grow approx. 10-15%
unique shopping experience compared to what they typically annually; this is why we are always looking for new locations, but
only for the really best ones. We are thoroughly reviewing market
have in shopping centres…
offers; however, if we are not convinced to a particular location, we
Opening stores in best available locations in the city is a part of simply reject it and wait for a better opportunity.
” development strategy. High streets are part of this strategy, thus
our
An interesting case is our store in Katowice on Stawowa Street.
our shops are present there.
After the opening, the footfall and retailing street increased and,
A good visibility and exposure are critical in our search for new additional services and gastronomy points arrived.
high street locations thus our natural choice are corner buildings, if I think that at present the retail in Poland is shopping centre driven,
possible. Another important factor is the prestige of the location. and high street retailing is further down in the retail hierarchy.
Other elements that we take into account are the relocation of space H&M aims to launch stores, which will draw people not only by
across the storeys, availability of ground floor area, storey height, their offer, but also the atmosphere of a place, some form of
and last but not least, the quality of the premises. We are always additional value. Opening of stores with a fresh design idea or a
trying to create a unique shopping atmosphere for our customers; revitalisation of a building in a market square, tenement house on a
this is why we arrange our shops in a way that offers something high street is an interesting idea to draw different group of
exceptional. customers and offer them more than a regular shopping centre
experience.”
Filip Pietkiewicz-Bednarek, H&M

9. John Duckworth Anna Bartoszewicz-Wnuk Patrycja Dzikowska Edyta Potera
Managing Director CEE Associate Director, Head of Research Senior Researcher Associate Director, Retail Agency
Jones Lang LaSalle Jones Lang LaSalle Jones Lang LaSalle Jones Lang LaSalle
+48 22 318 0044 +48 22 318 0007 +48 22 318 0003 +48 22 318 0046
john.duckworth@eu.jll.com anna.bartoszewicz-wnuk@eu.jll.com patrycja.dzikowska@eu.jll.com edyta.potera@eu.jll.com
High Street Retailing – July 2010
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