Poland’s booming economy fuels demand for life’s luxuries
When Lukasz Wichlacz launched an online coffee business with two friends from the northern Polish town of Kolobrzeg, he could count his customers on the fingers of one hand. Six years on, Coffeedesk is one of the country’s biggest coffee retailers and Mr Wichlacz has also opened a café.
“In our first month we shipped 17 orders in total, and I think 14 of these were made by us or our family and friends,” Mr Wichlacz recalled. “Only three went to people we didn’t know. This month we expect to send about 15,000 orders.”
Coffeedesk’s exotic blends and coffee-makers are not the only upmarket items flying off Polish shelves. Almost three decades of unbroken growth have pushed Polish output per capita — on a purchasing power basis — above that of Greece and within striking distance of Portugal. Wages are rising at about 7 per cent and Poland’s growing middle class is increasingly splashing out on the finer things in life.
“Household consumption — fuelled by expected increases in budgetary expenditures, a tight labour market and rising wages — continues to grow,” the World Bank recently noted.
One of the main beneficiaries of the consumption boom has been Poland’s food and drink scene. Restaurants and food markets are springing up in big cities such as Gdansk, Krakow and Warsaw — where the former Communist party headquarters now hosts several hip bars and a café. A study by research group GfK found that the average monthly amount Poles spent on dining out jumped 22 per cent in 2018.
Mr Wichlacz says the number of specialty coffee shops in Poland has risen from three to 200 over the past decade. And as well as topping up on caffeine, a nation traditionally keener on vodka and beer has also begun to indulge in wine. Over the past decade wine imports have doubled, while whiskey imports have quadrupled.
Dorota, who declined to give her full name, has run a wine store in central Warsaw for the past decade. She said her clients were increasingly searching for better quality.
“They are not satisfied with table wine any more, with the cheapest,” she said. “The average price of the wine that we sell has risen. When we started it was maybe 20 zlotys, then 25 zlotys then 30 zlotys. And now . . . a price of 50 or 60 zlotys per bottle is not something shocking . . . And 100 zlotys is definitely a new trend.”
Natalia Ostolska, a wine buyer based in Saint-Emilion, France, said that as well as drinking more wine, Poles had increasingly started to cultivate it. In 2009, there were only 26 vineyards in Poland. Now, there are about 200 — a phenomenon she attributed to the country’s rising spending power as well as climate change.
“Polish people are getting wealthier and have more money for luxuries and travel more. I think that Poland joining the EU also helped to access a wider selection of alcohol from different parts of the world,” she said. “I think for some Poles establishing vineyards is an investment similar to property investments.”
The surge in consumption has helped transform Poland’s urban centres, with gleaming shopping centres in cities across the country one of the most visible emblems of the economic transition. As well as buying more expensive goods, Poles are prepared to spend more on personal services such as manicures and haircuts.
“It’s changing, I guess. Five years ago, I wouldn’t have paid 100 zlotys for a haircut because standards were lower, and people also thought: ‘100 zlotys for a haircut — why?’” said Mateusz Grodzicki, who works in Undercut, a barbershop in central Warsaw, where customers can have a whiskey or coffee on the house while they wait to be coiffed. “But right now, people in Poland are chasing quality in every aspect of life.”
Another big change has been holidays. In the early, chaotic years of Poland’s transition to capitalism, travelling was something few could afford. But for the past 10 years Polish tourism has enjoyed unbroken growth. Both 2017 and 2018 were record years, and 2019 is likely to be as well, according to Pawel Niewiadomski, head of the Polish Chamber of Tourism.
Despite the progress, not everything is rosy. The gains from Poland’s boom have not been equally shared, with big differences between the poorer east and richer west, as well as between towns and rural areas. In the coming year, the economy is expected to slow from its recent rapid tempo as the knock-on effects of Germany’s stuttering economy beginning to ripple through its supply chain, where Polish companies play a big part.
Paradoxically, according to Piotr Bujak, chief economist at Polish bank PKO BP, Poland has become more, rather than less, vulnerable to external shocks despite its citizens’ spending surge, as exports have grown faster than domestic consumption.
Mr Wichlacz, however, remains optimistic. He is eyeing a crowdfunding round to finance further expansion, and plans to open a second café in central Warsaw in 2020. In the longer term, he is also considering opening in other big Polish cities.
“We’re in a market that is growing very fast. You see the same in the market for wine, craft beer and so on. People are more and more interested in what they are eating and drinking. They want to know where is it from, whether it is healthy,” he said. “We still expect really good times.”