European retailers eye portfolio expansion

Retailers across Europe have shown their commitment to bricks and mortar, with almost three-quarters confirming plans for expansion. Of more than 60 retailers with a combined global footprint of more than 130,000 stores, 72% are planning expansion, with 71% of those expecting to do so in markets where they already have a presence, according to CBRE. Almost all – 97% – said physical stores are a core component of their overall strategy. There is also a growing preference for larger stores, with 72% of retailers aiming to expand store sizes, representing a substantial rise from 26% in the same survey in 2022. The preference for larger stores is mainly seen in the athleisure and fashion sectors and in capital cities. Luxury retailers are increasingly inclined to own their stores rather than lease them. However, leasing remains the dominant approach for the broader market, with 84% of respondents indicating they have no plans to increase store ownership. Six in 10 retailers anticipate that green leases will be part of lease negotiations within the next three years, up from 45% two years ago. In terms of location, 45% of retailers prefer retail parks because of high footfall, free parking and the concentration of similar retailers in these parks, all of which influence store performance. Alex Ozga, associate director in the European research team at CBRE, said: “After a number of challenging years, retailers have confidence in the market and are looking to expand. “The trends highlighted in the survey are further backed by performance data from CBRE-managed shopping centres across Europe, which shows that tenant sales increased by 5% in H1 2024 on a year-on-year basis, well above the rate of inflation. Retailers see the value of the physical store, and that it is a significant enabler in achieving growth ambitions.” Chris Gardener, CBRE’s head of European retail, said: “Improved consumer confidence is starting to translate into higher levels of consumer spending, which is giving retailers confidence to commit to stores both in markets familiar to them and in new markets altogether. Brand loyalty is often enhanced through in-store experience, and this is where we see retailers really committing to store investments and using bricks and mortar to truly showcase their brand identity.” Photo © Westend61/REX/Shutterstock