There are signs of optimism in the results of the CBRE European Retail Occupier Survey 2024, as the retail sector and regional economy approach the end of a challenging period.
The study includes responses from over 60 global retailers with a store network of over 130,000 locations, and shows that 71% of retailers planning to increase their number of physical stores intend to do so in markets where they are already present.
Spacious stores are among the top priorities, with 72% of respondents aiming to enlarge their store size. This marks a significant increase compared to the 2022 CBRE study results, where only 26% of respondents expressed interest in operating larger surfaces.
The preference for larger stores is one of the key trends observed in the market, particularly among fashion and athleisure brands in capital cities and major urban areas.
A trend specific to the luxury sector is owning stores instead of leasing them. However, leasing remains the predominant strategy for the mass market, with 84% of respondents stating they have no plans to purchase stores.
Chris Gardner, head of European retail, CBRE, said: 'Improved consumer confidence is starting to translate into higher spending, which is giving retailers confidence to commit to stores both in markets familiar to them, and 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.'
In terms of preferred formats, retail parks are dominant, with 45% of respondents favouring them as locations for future stores.
From a digital perspective, retailers are in a phase of exploration and learning, rather than implementation. 61% of respondents stated they are investigating Artificial Intelligence (AI), but only 25% have already implemented AI solutions.
ESG standards are also becoming increasingly important. According to the CBRE study, six in ten retailers anticipate that over the next three years, “green” building features will become an advantage in leasing negotiations. This represents a 45% increase over 2022 - a clear evidence that environmentally friendly contracts are expected to become more common.
Overall, bricks and mortar stores remain an essential component of strategy, with 97% of respondents acknowledging their importance. Additionally, there is a shared belief on the effectiveness of physical stores, which outperform online retail in terms of consumer engagement, cross-selling, overall sales strategy effectiveness, introducing new products, and attracting new customers.
