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Intermarché Finally Reaches Warsaw

French cooperative Les Mousquetaires Intermarché will open its first store in Warsaw this year. While the ambition of the retailer to reach the Polish capital city has already been known for months, newspaper Dlahandlu reports the opening is planned for September 2017. Another store is expected for 2018 in a shopping mall in the northern part of the city. 


Needs to Deliver on Ambition

The arrival of Intermarché in the capital city, twenty years after setting foot in Poland, highlight the limits inherent to any cooperative of store owners willing to expand abroad: the long term effort and endeavour required. The retailer has struggled to build a nationwide presence, being largely absent from the eastern half of the country. Its proposition appeals mainly to entrepreneurs in lower tier cities and rural areas. This leaves de facto Intermarché excluded from the cities and their higher spending power, which have acted as a magnet for all retailers, including more recently discounters (eg. Biedronka). This leaves us wondering whether Intermarché is not arriving too late to grab its slice of the cake. 

The synergy with the usual nearby Bricomarché DIY store will be difficult to achieve in urban areas, where strongly established international operators are already trading. In middle-tier cities, Intermarché faces local players, such as Polomarket and Stokrotka; as well as rapidly growing Dino (+117 supermarkets in 2016). Despite this, Intermarché's decentralised structure and international backing makes it a fierce competitor. Its expertise in fresh with instore production (meat processing, bakery) is a strong USP versus competitors. For this reason, LZ Retailytics anticipates solid growth for the supermarket chain with turnover expected to increase by 6.1% annually over the next five years.

Even so, we believe store openings will be unsufficient to reach the retailer's "Cap 2020" strategy, translating in the creation of 500 Polish supermarkets between 2014 and 2020. LZ Retailytics' forecast is much more conservative, with less than a 100 store openings expected. We believe the Polish top management, appointed last month, will indubitably attempt to give a new impulse to the network going forward. 

With contribution from Senior Retail Analyst Sebastian Rennack. 
Topics: Les Mousquetaires Intermarché