Money-for-parents policy has top Polish retailer on job hunt

Bloomberg

The roll-out of the Polish government’s flagship welfare program hit the country’s biggest retailer with a bittersweet result last quarter, lifting sales while also pressuring it to raise wages as it struggles to hire new workers.
Sales at Portugal’s Jeronimo Martins SGPS SA’s Polish Biedronka supermarket chain jumped 10.2 percent in April to June from a year earlier to 2.4 billion euro ($2.66 billion), it said in a quarterly filing last week. The surge came amid the start of a 500 zloty-a-month ($127) payout for every child after the first introduced by the conservative government. The program is boosting consumption and pushing an increasing number of low-wage earners out of the workforce, according to employers lobby group Lewiatan.
“Particularly on labor costs, we will be having some pressure in Poland,” Ana Luisa Virginia, Chief of Staff to Jeronimo Martin’s Chief Executive, told a conference call Thursday. “There’s also a lack of labor on offer that adds pressure on salaries.”
The child handout, which is on track to lift domestic demand and keep the $475 billion economy growing more than 3 percent this year, is more generous than a similar benefit in oil-rich Norway, when the two countries’ wage levels are considered. The main pledge of the ruling Law & Justice Party in the run-up to last year’s election, the payouts accompany an increase in the minimum wage as the government seeks to replace an economic model that it says is driven mainly by labor-cost differentials with more innovative and higher-value production.
Child benefits are also boosting bank deposits in a sign that disposable incomes are rising along with consumption, Cezary Stypulkowski, CEO of the third-largest Polish lender MBank SA told reporters in Warsaw on Thursday.
A negative side-effect is that employers like Biedronka, whose 2,693 stores make it Poland’s biggest seller of goods from diapers to booze, are finding it increasingly difficult to fill vacancies. With the benefits encouraging those with multiple children to drop out of the workforce, the pool of available employees, already limited by about 2 million Poles living abroad, may shrink further if the government carries out its promise to cut the retirement age as soon as next year.