Retail in Poland: An Assessment of Changing Market and Foreign Investment Conditions

Abstract

W. MICHALAK: in Poland: An Assessment of Changing Market and Foreign Investment Conditions. Retail business in Poland is undergoing a profound transformation. After decades of a widespread neglect, rationing, and shortages, the reforms introduced in Poland in 1990 created conditions for constructing an open market economy and privatisation of state industries. The retail sector was one of the first areas of economic activity where both domestic and foreign investors took advantage of the new conditions. Most state-owned retail chains were broken up, many new store locations were added, and foreign investors introduced new standards and formats to the Polish consumers. The objective of this paper is to review some of the major trends in Polish retailing that took place since 1990 from the perspective of both foreign investment and domestic competition. First, the objectives and legacy of the centrally planned economy are examined. Then, the principles of the transition to a market economy are reviewed in the context of privatisation of the retail sector including a closer examination of the role of FDI in this process. The theoretical discussion provides a background against which changing consumer demand and responses of both foreign and domestic investors are reviewed. Finally an attempt is made to summarize the major processes involved in the transformation of the Polish retail from a centrally planned to market economy. W. MICHALAK: [much less than] Retail in Poland: An Assessment of Changing Market and Foreign Investment Conditions [much greater than] [Le secteur de detail en Pologne: Une evaluation des conditions changeantes de marche et d'investissement etranger]. Le secteur de detail en Pologne connait une profonde transformation. Apres des decennies de rationnement et de penurie, et pendant lesquelles on ne s'en est pas occupe du secteur, les reformes introduites en Pologne en 1990 ont cree les conditions favorables a la construction d'une economie de marhce ouverte et pour la privatisation des industries d'etat. Le secteur de detail fut un des premiers domaines d'activite economique ou les investisseurs domestiques et etrangers ont saisi l'opportunite presentee par ces nouvelles conditions. La plupart des chaines de detail dont l'Etat etait proprietaire ont ete demantelee, de nombreux nouveaux sites commerciaux ont ete ajoutes, et les investisseurs etrangers ont introduit des nouveaux standards et de formats aux consommateurs polonais. L'objective de cet article est de passer en revue certaines des grandes tendances qui ont touche le secteur de detail polonais depuis 1990 de la perspective de l'investissement etranger et de Ia concurrence domestique. D'abord, les objectifs et l'heritage de la planification centralisee de l'economie sont analyses. Puis, les principes de La transition vers une economie de marhce sont en pourparlers dans le contexte de Ia privatisation du secteur de detail y compris un examen plus approfondi de l'investissement etranger direct dans ce processus. La discussion theorique foumit le contexte dans lequel les transformations de La demande des consommateurs et les reponsses aussi bien des investisseurs etrangers que domestiques sont examinees. Enfin, on tente de synthetiser les processus majeurs qui sous-tendent la transformation du secteur de detail polonais d'un secteur caracterise par une planification centralisee a une economie de marche. Introduction Retail business is the fastest changing sector of the Polish economy. There are several reasons for this but, perhaps, the most important is the legacy of a widespread neglect, reglementation and shortages that preceded the peaceful conversion from the centrally planned to a market economy in 1989. After the initial turmoil of the first formative years of the economic, political, and social transformation, millions of Poles rushed with their fully convertible earnings in New Zlotys (NZL; the average conversion rate in 2001 was US$ 1 = NZL 4. …

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