Legal Chaos Stalls Company Investments

Entrepreneurs face numerous challenges like geopolitical instability, financial issues, and legal chaos. The lack of clear regulations and unpredictable law changes prevent companies from making new investments. As many as 40% of businesses do not plan any actions in case of war, while the same percentage considers the risk of front-line shifting. These are some of the critical findings of the RetailTech2024 report, which analyzes large Polish retail enterprises’ opportunities, challenges, and investment plans.

The report divides challenges into internal, related to the company’s operations, and external, concerning the market environment. This year’s survey results are consistent with last year’s, with one significant difference: while in 2023, only 13% of entrepreneurs pointed to legislative changes, this year, the percentage is as high as 40%. Frequent and unpredictable modifications in regulations cause uncertainty and halt investment activities.

„In conversations with our clients, legal uncertainty has become particularly severe in recent years. The latest example is KSeF, whose implementation deadline was changed practically at the last minute. Although the decision was justified, it undermined entrepreneurs’ trust in the stability of regulations, which translates into their caution in making further investments, especially in the IT area.”

– says Marcin Zimnicki, Director of Retail Technology Hub and Member of the Board of Exorigo-Upos S.A.

Another barrier to company development is the need for more financial support from the government and the EU. 33% of businesses, especially medium-sized ones (employing 50 to 249 employees), indicate the need for grants and other forms of assistance. The geopolitical situation also causes concern – 35% of companies, mainly medium-sized ones, consider it a growth inhibitor.

Overall, 41% of businesses declare that they are preparing to some extent for the possibility of war. 16% of them are already implementing appropriate business scenarios. Interestingly, the more a company invests in IT, the better prepared it is for such eventualities. Companies allocating 5-6% of their turnover to IT are the most advanced in their preparations. In contrast, those investing 3-4% are just considering such steps, and companies spending less than 2% do not consider this option.

Entrepreneurs’ challenges include changing consumer trends and compatibility issues with new solutions.

„Trend variability is a key element in business development planning. These changes are influenced not only by consumer preferences but also by external factors. The pandemic, which suddenly changed customers’ shopping habits, is a perfect example of this. Flexibility is the foundation of our operations, allowing us to respond to market expectations and continue to grow.”

– emphasizes Anna Schabikowska, Board Advisor, Exorigo-Upos S.A.

Internally, similar to last year, finances remain a key obstacle. Nearly half of the companies have difficulty allocating a budget for IT investments. Additional problems can be divided into human and technical. 45% of retailers point to a lack of awareness and understanding of technology – they prefer to stick to proven, older solutions. Additionally, 37% of companies struggle with a lack of expert knowledge and a shortage of employees – programmers often choose to work for technology companies rather than retail ones.

Regarding technical challenges, over a quarter of respondents point to compatibility issues with new technologies and existing systems. Global solutions also need help in the Polish market, mainly due to local legal regulations. Moreover, one-fifth indicates a lack of understanding of local needs by the foreign headquarters, which stops expenditures and thus blocks changes.

RetailTech 2024 Report: The study with representatives of 100 medium and large companies with an annual turnover exceeding 100 million PLN was conducted by the B2B Research and Solutions Institute Keralla Research in August 2024. Of all respondents, 61 represented companies employing 50 to 249 people, while the remaining 39 entities declared employment higher than 250 people. Only companies that indicated they operate in the retail sector, supplying their products to the market through general-purpose stores, franchise, e-commerce, e-platforms, or applications, were qualified for the study. The respondents represented retail sectors: food, pharmaceuticals and cosmetics, furniture and electronics, clothing and footwear, and fuels. The respondents were individuals responsible for the technology area in the company. One respondent provided an opinion on behalf of one company. A quantitative method, standardized telephone interviews (CATI), was used.

Link to download the full report: RetailTech 2024 Report