The UK remains the number one target for retailers looking to expand their store presence, reveals new research from CBRE.
This week sees the UK trigger Article 50, which will begin its negotiations with the European Union for its eventual exit from the EU. Despite cautions and concerns surrounding that departure, though, the country has lost none of its appeal as a key global retail destination.
According to CBRE, the UK is the top destination for retailers planning to expand their store presence in Europe, the Middle East and Africa in 2017. 65 per cent of retailers surveyed cited the UK as their target market for expansion.
The UK leads the way as the most attractive retail market in the region and is closely followed by France (43 per cent) Germany (38 per cent), UAE (24 per cent) with Spain, Netherlands and Hungary attracting 19 per cent of respondents.
51 per cent of international retailers surveyed intend to open up to five stores across EMEA by the end of 2017, the report also found. However, the amount of retailers with large-scale expansion plans in 2017 is expected to slow down with 70 per cent of retailers indicating that they expect to open 10 stores or less, reflecting a more cautious approach to their growth plans.
“Our research shows that retailers are committed to opening new stores and that the UK remains an attractive destination for retailer expansion. However, finding quality retail space in the right location remains a challenge and this has been a consistent rental driver in some of the most prime retail areas across EMEA pushing some of the traditional European retail Centre’s to large rental growth throughout 2016,” comments Andrew Phipps, Head of UK & EMEA Retail Research at CBRE. “There is little expectation from retailers that this lack of quality space in key Western markets is likely to decrease in 2017.”
London still attracting retail brands from around world
5th December 2016
London continues to attract retail brands from around the world, confirming its reputation as a global retail hub.
The UK capital has been the subject of much speculation following June’s EU referendum, as some fear that the UK’s vote to leave the European Union could damage its position as a central market for investors and businesses.
Nonetheless, over 75 new retail entrants have been drawn to London in 2016, with the prime streets in Mayfair and Chelsea proving to be a magnet for luxury brands. Two thirds of these new entrants were European, with 16 from the UK, 11 from France and nine from Italy. These included leading French designer Vanessa Seward, who chose 42 Ledbury Road in Notting Hill for her first UK store, and IKKS, one of France’s most well-known fashion retailers, opening its first UK standalone store at 10 South Molton Street.
“Despite perceived high rental levels and competition for space, as well as any uncertainty immediately after the vote to leave the EU, retailers will always look to the areas and streets which best reflect their brand and allow them to develop their offering and reach new audiences,” says Phil Cann, Head of UK Retail at CBRE.
CBRE’s analysis of the number of new retailers, both domestic and international, entering the Central London market with their first Central London store during 2016 supports the reputation of London’s retail property as a safe haven for investors.
20 of the new entrants operate in the luxury sector, gravitating towards prime streets including South Molton Street, Sloane Street and Covent Garden. Alongside IKKS, French accessible luxury brand BA&SH opened on South Molton Street and Italian menswear Stefano Ricci on South Audley Street. From the US, sportswear brand New Balance opened its first UK flagship with a 12,570 sq. ft. store on Oxford Street, while the Dominique Ansel Bakery (famed for creating the ‘cronut’) opened its first European store on Elizabeth Street in Belgravia. The bakery chain was one of six US brands making up the 13 new entrants from the coffee and restaurant sector. One of these was coffee brand Nespresso, with its first London ‘Café Nespresso’ unit offering both non-alcoholic coffee mocktails and food alongside coffee at its Cheapside site.
Norton Clothing, a pillar of British style and engineering throughout the 20th century, also chose Beak Street in London’s Soho as the location for its first UK store. The new outlet will offer shoppers a taste of Britain’s motorcycling legacy.
“London remains the most attractive destination for a first UK presence, and the range of retailers expanding their portfolios here is proof of the capital’s draw,” adds Cann.
Indeed, 2016 is set to be a record year for London retail, with investors expecting to acquire more than £2bn worth by the end of December.
Retailers confident about UK Christmas shopping
28th November 2016
Retailers are confident about Christmas sales this year in the UK.
The seasonal shopping period has officially begun, following the country’s annual Black Friday event, a tradition ported over from the USA. While online sales rose 6.7 per cent, below the 25 per cent growth expected, footfall was up 2 per cent, with high street shops seeing foot traffic jump 2.8 per cent, beating retail parks and shopping centres. All outperformed expectations, though, with analysts predicting a decline of 5 per cent in people shopping in-person.
As attention now switches to Christmas, the mood is positive, with a Barclays survey revealing that retailers are optimistic they will achieve a positive result in their biggest sales period.
60 per cent of retailers are more confident about Christmas trading compared with last year. The mood is boosted by generally positive figures surrounding the UK economy, bucking gloomier forecasts for performance in the wake of a Brexit vote in June’s EU referendum. Indeed, 63 per cent of retailers predict that Brexit will have no impact on Christmas spending this year.
When asked what factors they expect to have a positive impact on consumer spending, 42 per cent cited more shoppers staying in the UK this Christmas as a potential boost to sales, perhaps in part due to the current value of sterling. Just under half of those surveyed (48 per cent) also expect the weaker pound to boost tourist or overseas spending, providing a further sales opportunity for UK retailers.
Barclays Head of Retail & Wholesale, Ian Gilmartin, comments: “It’s very heartening to find that retailers are optimistic about their prospects heading into the Christmas season. New challenges have emerged this year, with currency moves and general uncertainty providing plenty for retailers to think about, so to discover that the industry expects a positive result in this important period is great news.
“I’m particularly pleased that retailers are seeking to take advantage of the export opportunity, by targeting both tourists and overseas sales.”Google+