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Poles may spend zł.27 billion on luxury items this year and that figure could increase 50 percent in two to three years, a KPMG report into the Polish luxury goods market reveals.

According to the report, more than half a million Polish citizens could earn more than zł.7,100 per month and are classified as “rich” or “affluent”. The “affluent” spend 15 percent of their wages on indulgences, the “rich” – 19 percent.

A group of nearly two million “aspiring rich” spend a further nine percent of their wages of over zł.3,700.

This is the effect of years of increasing wages and falling unemployment, Bartosz Marczuk an expert from the Sobieski Institute think tank told WBJ.pl.

“Poles are starved of consumption after years of communism,” Mr Marczuk said.

“As society gets richer, Poles increasingly willingly, and increasingly selectively, choose luxury goods. Their choices are no longer of a spontaneous nature based on the incidental purchase of these types of goods and services,” said Patryk Kitkowski from wyrafinowani.pl, a luxury lifestyle blog.

Putting on the brakes

But Mr Marczuk said the level of spending on luxuries is not likely to continue to grow. “It might slow down, the situation on the labor market is worsening,” he said.

Mirosław Izdebski, Sales Director OFF-Trade, Moet Hennessy Polska, disagrees. “The people earning much above the national average will not … be affected,” he said.

Moet Hennessy entered the Polish market in April 2008, just before the economic downturn, but has recorded annual sales increases in two-digit percentages, Mr Izdebski said.

Waging the storm

“Our analysis indicates the downturn did not destroy the strongest brands,” KPMG partner Tomasz Wiśniewski said in the report. “The changes in client behaviors is clearer. They are more demanding, their shopping habits more conservative. Quality and timelessness have returned to their favor, extravagance is not fashionable,”

KPMG estimates suggest that about half of the world's luxury brands are already available on the Polish market, with 88 percent of the most significant car brands available but only one-third of leading fashion labels. When the internet is considered, the second figure grows to 70 percent.

Mr Kitkowski pointed out the recent opening of an Aston Martin dealership in Warsaw, and the earlier opening of a Bentley showroom.

These luxuries were defined in the KPMG report as “any well recognized brand … which due to its specificity … acquired a luxury character”.

Mr Marczuk said demand for luxury was a combination of supply and demand and psychological mechanisms which force us to compare ourselves to others.

“Poles are slightly mad about luxury cars,” Mr Marczuk said. He also said Poles find it important to impress others. “It is far easier to impress a neighbor by coming home in a luxury car that in a pair of Gucci pants.”

But Mr Izdebski said luxury goods were something the aspiring liked to flirt with when they could, but something the affluent embraced as a common part of their lifestyle.

Victoria Ziarkowski