Emerging markets catch up in global retail stakes: CBRE

The UK maintained its position as the world's most dominant retail destination in 2009, followed closely by the United Arab Emirates (UAE), according to the latest edition of the How Global is the Business of Retail? report by real estate adviser CB Richard Ellis (CBRE). The UK attracted 58% of all international retail brands surveyed, compared with 54% for UAE, propelling the emerging market into second place in the ranking for the first time. China also improved its position, moving up two places to enter the top five for the first time, with 47% of retailers now present there.

CBRE's annual survey - now in its third year - mapped the global footprint of 294 of the world's top retailers across 69 countries, exploring the globalisation of the retail industry at national and city levels and highlighting differences between sectors and regions.

Overall, Europe continued to dominate the top 20, with all five of the largest European economies featuring in the top 10 international retail destinations. After market leader the UK, France occupied fourth position, followed by Spain (6th), Germany (7th) and Italy (8th). However, the top 20 list has become considerably more global in the past year as retailers target key emerging markets in addition to the more established retail destinations.

In terms of cities, London topped the league, attracting 56% of all international retail brands surveyed. However its position is increasingly being challenged by Dubai, with the second highest presence of international retailers (55%). Rounding out the top five, London and Dubai were followed by the established markets of Paris (46% of international retailers), New York City (44%) and Hong Kong (43%) respectively.

Peter Gold, Head of EMEA Cross Border Retail at CBRE, said the composition of the top five retail cities was 'hardly surprising' given that these are large international capital cities, with strong local regional catchments, and which attract large numbers of affluent consumers. 'They also have high levels of tourist and business visitors and are therefore very attractive locations for international brands,' he said. A more surprising finding was Dubai's rise into second place, he noted, a development partly attributable to the availability of good franchise partners in the region. Retail expansion in the Middle East, China and Eastern Europe was being driven by the franchise model, he added, noting that this option was not available in an emerging market such as India which is more tightly regulated.

The CBRE survey found that retailers from all sectors continued to expand their global presence in 2009, albeit at a slower pace than in previous years.
Whereas the surveyed retailers expanded their global presence by 12% in 2008, this rate slowed to 4% in 2009 in the wake of the financial crisis and economic recession. Almost half (49%) of all retailers surveyed were active in each of the three main global regions, but their footprint varied widely. 'The rate of expansion may have slowed, but the scope for further internationalisation is significant,' said Nick Axford, Executive Director of EMEA Research and Consulting at CBRE.