UK supermarket company Tesco is expected to achieve sales in Poland of €1bn (US$1.09bn) this year, confirming its position as the number two retailer in the market, behind German operator Metro, according to food industry research provider IGD.

IGD's new European Grocery Retailing report forecasts that Tesco will leap four places to number two, overtaking Carrefour, Auchan, Casino and Jerónimo Martins, fuelled by its market leadership in the hypermarket sector and the full consolidation of the sales from its 2002 acquisition of HIT. 

Six players have left the Polish market since 2002 including Rewe, Dohle, Jerónimo Martins, Frac, Reitan Narvesan and Edeka, due to the highly competitive market, increased price competition and the relatively low degree of retail concentration, the report said. 

However Tesco has flourished and now holds the top spot in the hypermarket sector.  Tesco's hypermarket portfolio doubled to 28 stores with the acquisition of HIT in 2002.  The acquisition also has other benefits for Tesco - HIT is a profitable business, the geographical location of its stores complements that of Tesco, and there is the opportunity to increase margin by adding more non-food offerings - all of which will help Tesco consolidate its leadership position, IGD said.

IGD forecasts further exits from the market as planning regulations get tighter and it becomes harder to open new stores.  Key candidates for withdrawal are Leclerc, Julius Meinl and Dansk Supermarked, who may find their position increasingly unsustainable due to their limited scale, and this would provide further acquisition opportunities for those keen to develop a leading position.

"These exits, combined with subsequent consolidation, will lead to a number of leaders emerging.  IGD forecasts that persistence will pay off for Tesco and that it will be one of these leaders, along with Metro, already the leader in the cash & carry sector, and Jerónimo Martins in the discount sector.  There is huge future scope for Tesco's development in Poland, we will also see it moving from the major cities to the regions to expand its appeal to consumers and its geographic presence.  It will bring its expertise in operating overseas to the Polish market and the future could see it challenging Metro for the overall top spot in the long-term," Louise Spillard, business manager at IGD, said.