Polish C&T set to grow 3.5% by the end of 2006

A new report from research group PMR says the Polish C&T market grew 3.1% to PLN8.7bn in 2005 and that it is set to grow by 3.5% to PLN9bn ($2.95bn) by the end of 2006, and a further 4-5% in 2007. “The market [in 2005] grew mostly thanks to the improved economic situation in the country and the rising purchasing power of Polish citizens,” says PMR. Both retail and online sales of cosmetics are growing.

The growth predictions assume that the government will lift excise tax on cosmetics. Poland is currently the only country in Europe to still have excise tax on cosmetics. It is currently 10% and means prices of cosmetics, particularly in the luxury sector, are 10-20% higher than in other markets in Western Europe.

Co-author of the report, Patrycja Ciosek says scrapping the tax, expected in January 2007, should push down cosmetics prices and boost both volume and value sales.

Hypermarkets and supermarkets were said to account for 48% of sales of cosmetics and fragrance in Poland in 2005, with specialised cosmetics chains accounting for 30% of sales and pharmacies for 4-5%.

Drogeria Natura is the biggest chain, with 242 of its own and franchise outlets, while Rossmann has 205 stores and leads on revenue (PLN913m in 2005). There are currently seven international chains operating in Poland, including Yves Rocher, Sephora, Schlecker, Marrionnaud and Douglas. Others, including The Body Shop, are expected to enter the market soon.

A full copy of the report is availble from www.pmrpublications.com, price €500.