How global is the business of retail? CBRE just released a report with this title, and it offers some important and surprising insight into global retail trends in 2017.
Now in its 11th annual edition, the report examined 47 countries and 123 global cities with a focus on markets that international retailers entered for the first time. Hong Kong had more target markets with new entrants, with 86 international brands opening their first store there, followed by Dubai (59), Taipei (52), London (49) and Tokyo (46).
In the new entrants group, the Coffee & Restaurants category remains strong, with one quarter of all new entrants from this sector, believed to be the result of a trend toward diversified business property leasing.
Not far behind, mid-range fashion accounted for 18% of all new entrants. In 2017, 32 global retailers entered the U.S., including 14 from Europe and 14 from Asia. The entrants were predominantly Italian and French Luxury and Mid-Range Fashion brands, but there were also a considerable number of Asian and European restaurants and cosmetics retailers.
Making a huge impact, German grocery discounter Lidl opened nearly 50 stores in the second half of 2017 and reportedly plans to open another 100 in 2018. In addition to examining the geographic data of new market entries, the report also investigated the sub-group of online-only stores who expanded their networks to include physical stores and saw a clear correlation between this trend and increased retail success.
Even so, physical store expansion rates are quite slow overall among the new entrants group, falling by 2.9% like-for-like (LFL) from 2016 activity. There is lower perceived need for larger stores in order to hit engagement goals, and many are still trying to understand what the right mix of brick-and mortar to online presence is for them. Learn more by reading the full report here.