ICSC: Retailers face lack of space in new markets

Lack of space in the right place is the main barrier for retailers seeking to enter new European markets, delegates at the ICSC European Conference in Stockholm heard on Wednesday.

This constraint is driving many retailers to establish their brand via the internet first before building physical stores. However, e-commerce does not pose the threat to traditional retail that the industry feared just a few years ago.

E-commerce is the latest in a long line of perceived but unfulfilled threats to the retail real estate industry over the last 50 years, attendees at the conference heard.

Speaking during the CEO Panel debate, Thierry Halff, vice president at Switzerland-based department store business Maus Frères, said: 'E-commerce is just new competition. We have known others over the last 50 years. Hypermarkets were a threat to old-fashioned department stores in the 1960s, but department stores are not dead. In the 1970s the shopping centre industry threatened high streets, but we discovered they are complimentary. E-commerce is the latest format. To manage this we need to offer better tenants and a diverse offer.'

The costs of selling online are now being acknowledged by retailers. Laurent Morel, chairman of French retail specialist Klépierre, said: 'If you sell a shirt for 15 euros on-line and it costs you 10 euros to deliver it, you know it isn’t going to pay. All retailers know they have to be on the internet, in the train stations, high streets and shopping centres.'

But having apparently absorbed multi-channel retailing, shopping centres must innovate to survive. Peter Wilhelm, CEO of Belgium-based developer Wilhelm and Co, said: 'The key is not only to develop something where people want to meet but where people want to dream. Architecture and design are crucial, hands-on management, a good leisure offer and new and great brands.'

Marcel Kokkeel, CEO of Citycon, is focused on getting new brands into the Nordics, where Citycon is growing. 'I don’t sell dreams, I sell traffic. Nice shopping centres, fully let. I don’t want to offer a dinosaur park.'

More than 600 delegates from 32 countries are attending the two-day ICSC European Conference in Stockholm this week.