Large scale expansion planned by retailers in 2013
Global retailers will continue to expand store networks in 2013 alongside the development of multichannel strategies, with 20% aiming to open 30 stores or more in Europe, Middle East and Africa (EMEA) by the end of the year - and nearly three quarters aiming to open five or more stores - according to new research from CBRE.
With multichannel retailing becoming increasingly important, online shopping remains an important area of growth alongside store expansion. Cross-border retailers will continue to develop online transactional capability in new markets in 2013, with 40% looking to expand their geographical online coverage, up from 28% last year. Last year, retailers’ plans were more focused on expanding online product coverage. Only 27% of retailers have no significant plans to enhance their transactional capability in 2013.
Retailers’ overall expansion ambitions for 2013 have not changed significantly from 2012. A similar proportion of retailers plan to open 10 stores or less (44%). One third of retailers – more than last year – plan to open 11-30 stores, reflecting an ambitious but realistic level of expansion given the difficulty in accessing prime space in many markets. However, large scale expansion plans are still on the agenda for many retailers with 20% looking to open more than 30 stores compared to 25% last year.
Peter Gold, Head of Cross-Border Retail - EMEA, CBRE, commented:
“Multichannel retailing has come a long way in a short time, but contrary to some predictions the store will play a key role in its development. There is a close correlation between the role of the store and multichannel – online shopping drives traffic to stores and retailers use it is an opportunity for store fulfilment. CBRE research shows that in two years’ time shoppers will equally favour collection from stores as they do delivery of online goods to their home or office.
“The news – direct from the retailers themselves – is that multichannel will lead to greater investment in new and existing stores, as it is seen as something that enhances rather than replaces the idea of shopping as a social activity. The internet has been regarded in apocalyptic terms by many retail market-watchers; however, we believe these fears are overdone and multichannel should be viewed as complementary as well as in competition.”
The most important target for retailers in 2013 is Germany (54% of retailers), reflecting its strong economy within the eurozone area. Twenty new international brands entered the German market in the first half of 2012 with the luxury and upmarket sector providing most of the new arrivals, including Paule Ka, Belstaff, Stone Island, Loiza, Zadig & Voltaire, Tory Burch and J. Lindberg.
Karsten Burbach, Head of Retail Services, Germany, CBRE, commented:
“Germany is back on top as the most targeted destination for international retailers, with overseas interest showing no sign of letting up and consumer consumption levels remaining constant year-on-year. We’ve seen some of today’s most in-demand retailers adding to their German store portfolios this year, including Apple, which secured four new sites, plus Hollister, which opened its first German high street stores in Bonn and Stuttgart. We anticipate more new arrivals in 2013 and beyond.”
Although retailers will target a wide variety of markets in 2013 they are still seeking to minimise risk. All other countries in the EMEA region will be targeted by fewer retailers than in 2012, with the next most sought markets: Austria (25%), The Netherlands (24%), United Kingdom (24%), Poland (23%), Spain (23%) and France (22%).
Peter Gold added:
“Amid a challenging consumer market, retailers are analysing their portfolios with rigour, seeking to right-size their store estates in terms of numbers and locations. They are also being increasingly selective in where they place their brands – both in terms of the countries they choose to operate within and the retail spaces they take. However, this has not stopped leading retailers seeking new opportunities in 2012. Far from it, expansion plans for 2013 are virtually as extensive as they were in 2012.”
Now in its fourth year, CBRE’s annual research report - How Active are Retailers in EMEA? - examines the expansion plans of 100 leading retailers across Europe and the Middle East. This year’s survey explores the markets that retailers are targeting in 2013 and the number of stores they are looking to open in each market.