Retailers continue EMEA expansion

Tuesday, 22 November 2011
Large scale expansion is still on the agenda for international retailers next year, according to CBRE’s annual research report, ‘How Active Are Retailers in EMEA?’, despite the economic challenges.
Nearly three quarters of international retailers (71%) are planning to open more than five stores in the Europe, Middle East and Africa (EMEA) region by the end of 2012, with 20% of retailers looking to open 40 stores or more in 2012 compared to 18% in 2011.
However, whereas in recent years retailers have focused on countries including the UK, Germany, France and Spain, many of the retailers are now searching for new opportunities. For the first time, Italy is leading the way as the most targeted country for retailer expansion. Italy, which has moved up from eighth place in last year’s rankings is followed by Germany, Russia, Spain and France, to make up the top five 2012 retailer hotspots, with more than 30% of retailers targeting each country.
The report also reveals that as well as retailers targeting a wide range of countries in both mature and emerging markets in 2012, they are largely focused on opening stores in countries where they already have a presence – a similar strategy to that adopted in 2011.
The Middle Eastern markets of Saudi Arabia, Kuwait and Qatar have also seen a significant increase in retailer interest compared to last year, with 15% or more of the surveyed retailers targeting these countries in 2012.
Peter Gold, Head of Cross-Border Retail - EMEA, CBRE, commented, “Retailers have had to cope with a more challenging consumer market than expected in 2011 and adopting a cautious approach to expansion has proved to be sensible call. The eurozone crisis has affected investment decisions in all industries, with retail no exception; however, this has not stopped retailers seeking new opportunities in 2012. Far from it, expansion plans for 2012 are just as extensive as they were in 2011.”
As well as physical expansion, online shopping remains high on the agenda for retailers. While acknowledging that the multi-channel approach is the best way to maximise sales potential, it is the online retail platform that will grow most quickly in coming years, with three quarters of retailers planning to increase their transactional capability in 2012. CBRE research reveals that 43% of retailers plan to significantly increase their online product coverage in 2012 and 28% plan to significantly increase the geographical coverage of their transactional capability.

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