Retailers Remaining in Russia Face Backlash in EU’s East

Retailers Remaining in Russia Face Backlash in EU’s East

Consumers in Poland, the biggest economy in the Europe Union’s east, are turning their backs on foreign retailers who have stayed in Russia since its invasion of Ukraine.

Sales in stores run by these companies in Poland have dropped, Prime Minister Mateusz Morawiecki said on Thursday, citing data available to the government. While he didn’t name names, French retailers including grocer Auchan and home improvement chain Leroy Merlin have become targets of boycott campaigns in the social media. 

Retailers Remaining in Russia Face Backlash in EU’s East

“It shows that ordinary people, more than corporations, understand that current times are exceptional,” Morawiecki told reporters in Warsaw on Thursday. “Decency requires taking actions that trigger losses.”

Discovery Inc.’s TVN, Poland’s biggest private television, said last week it’s suspending its sponsorship agreement with Leroy Merlin and state-owned broadcaster Polskie Radio has pulled the company’s commercials off the air. The government is also toying with the idea of a special levy on multinationals that resist the corporate exodus out of Russia.

Poland has been gripped by anti-war sentiment as the country accepted more than 2 million refugees from neighboring Ukraine. The data on non-cash transactions released by PKO Bank Polski SA, the country’s biggest lender, showed slower growth in sales at chains that are still present in Russia since the conflict began a month ago.

The backlash could carry a cost for retailers. Three decades of almost uninterrupted growth has turned Poland, the EU’s largest economy outside the euro, into a lucrative consumer market for international retail chains. Sales in stores in the country of 38 million rose 8.9% last year, compared with average growth of 2.6% for the European Union as a whole, according to Eurostat data.

Brave Decisions

Local managements are trying to control the damage. Leroy Merlin, which one internet meme dubbed Leroy Kremlin, said the company is helping refugees including 300 workers and their families from its Ukrainian unit. The retailer operates 75 outlets in Poland compared with 112 in Russia. 

Retailers Remaining in Russia Face Backlash in EU’s East

The Polish unit of Danone SA, meanwhile, urged the company and the whole industry to make “more brave decisions” regarding Russia, according to a statement sent in response to questions from Bloomberg News.

While the food giant has stopped investments and the shipment of non-essential products like Evian bottled water and Alpro dairy alternatives, it continues to sell dairy products and baby food in Russia.

The local units of Auchan, Decathlon and Leroy Merlin, which are owned by the Mulliez family, declined Bloomberg News requests to disclose their sales in Poland since the war began.

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