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The Warsaw Voice » Business » October 29, 2008
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Appetite for Restaurants
October 29, 2008 By Andrzej Ratajczyk   
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Poles are eating out more frequently these days. Thanks to this trend new restaurants are cropping up and are all enjoying a significant rise in custom.

According to Poland's Central Statistical Office (GUS), the number of eateries in Poland has grown rapidly over the last 10 years. In 1995 there were just some 60,000 food-service outlets while by the end of 2006 this number had already risen to 92,400. During this time almost 5,000 restaurants opened, boosting the total number to 10,000, as did over 17,500 small new eateries, almost 3,000 diners and 6,000 other types of outlets selling food. However, in comparison to other countries, Poland's food-service market is still poorly developed. The average Pole eats out just a few times a year compared with the average Englishman, Frenchman, Italian or German, who does so 50-70 times a year, and the average American, who eats in restaurants 150 times a year.

The situation in Poland, however, is rapidly changing since people here are starting to copy Western Europeans in the way they spend their leisure time. Eating out, or "eating on the town," as the Poles call it, has in recent years become more popular and routine for many people and is not so much of a ceremony as it used to be. What's more, the number of satisfied customers who return to their favorite restaurant is increasing as is the number of people who like or want to try something new.

"Another obvious reason is rapid economic growth and people having more money in their pockets," says Piotr Grajewski, vice-president of Santa Fe Partners, the owner of the Blue Cactus restaurant and Iguana Lounge Club in Warsaw. "This trend is confirmed by our increasing sales, which have grown every year since we opened 12 years ago."

Poland's food-service sector is not only developing rapidly but is also keeping pace with changes in local customs. The sector is raising service and interior design standards and increasing food choice and quality. People no longer come to restaurants just to eat because they are hungry but to enjoy themselves and for business and social meetings. Restaurants located within large retail centers are hugely popular since lunch is always a pleasant break from shopping.

Research by Euromonitor International, a provider of market intelligence, shows that people's spending in restaurants in Poland is likely to rise in the coming years by 6-7 percent annually on average. According to Euromonitor, every year through to 2011 all segments of the Polish food-service market are likely to see a double-digit percentage increase in sales and the total value of sales will rise from zl.20 billion to zl.28 billion.

According to the analysis, fast-food outlets have the greatest growth potential in Poland even though hundreds of them have opened in recent years. Fast-food sales are expected to have increased by over 30 percent by 2011. A slightly slower rate of sales growth, 28 percent, is predicted for pizzerias, and 22 percent for restaurants. Restaurants are expected to account for the greatest sales revenue, almost zl.10 billion. According to Euromonitor, rising personal incomes combined with changing lifestyles and standards will boost demand in Poland for food services in the next few years.

The report goes on to say, however, that the growth of the more exclusive eateries and those offering ethnic food will be limited because of the small number of large cities in Poland. "In Warsaw it seems that the market is saturated with fast food, meaning the cheapest outlets, and also with premium restaurants that are the most expensive, and it is the casual dining segment that has the biggest growth potential," says Santa Fe Partners vice-president Wiesława Szczep.

Seven food-service companies are listed on the Warsaw Stock Exchange and its alternative stock market, New Connect, and more are preparing to follow suit.

"Our development strategy also foresees being listed on the stock market although we are not discounting the entry of a core investor," says Grajewski. Santa Fe Partners has been preparing to expand in several cities in Poland for some time but these plans have been held back for lack of interesting locations. "The real-estate market poses a real obstacle to food-service sector development because of the very high rents asked for sites in good locations," says Grajewski.

Despite problems with sites, the biggest restaurant chains in Poland do not intend to limit their expansion. McDonald's, which currently has 214 restaurants in Poland, plans to open another 200 over the next three to five years. PolRest is fast expanding its chain of restaurants that include Rooster, Invito, Karczma Po Zbóju, Gazdowo Kuźnia, Karczma Zapiecek, Stek Chałupa, Stara Izba, Karczma Kmicic, and Gazda. PolRest currently has 22 restaurants but plans to increase this number to 64 by the end of 2012.

AmRest Holdings, the biggest restaurant chain in Central and Eastern Europe, also has ambitious plans. Since 1993 AmRest has been expanding its brand portfolio of restaurants that today includes KFC, Pizza Hut, Burger King, Starbucks, and Applebee's, an American casual-dining restaurant, by way of franchises and joint ventures. Currently AmRest has a total of almost 400 Quick Service and Casual Dining restaurants, including two of its own newly created brands, freshpoint and Rodeo Drive.

Sfinks Polska and Grupa Kościuszko Polskie Jadło are two other big players on the Polish food-service market. Sfinks Polska has 105 Sphinx restaurants all over Poland and another six abroad, 11 Chłopskie Jadło restaurants in the premium segment, and three Wook Chinese restaurants. Grupa Kościuszko specializes in restaurants that serve traditional Polish food and currently has six Polskie Jadło premium restaurants, five Ready&Go fast-food outlets, one mobile food-service outlet, and four Lanczowisko restaurants.
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