Retailers are being more cautious in opening new international stores across the globe, leading to a slowdown in global expansion, according to a new report from the world’s largest commercial property agency.
With 450 offices in 100 countries CBRE is the world’s largest commercial agency. In a recent comprehensive survey of 47 countries and 123 cities they found that retailers’ 2018 international market growth fell 2.9% on 2016.
Analysts suggest two primary reasons for the fall: demographic shifts in population growth which have reduced demand for new retail space, as populations become more dense; and e-commerce disruption which has prompted caution in opening new stores.
However, CBRE pointed out, just because retailers are being more deliberate about their growth doesn’t mean they’re not growing at all.
U.S. based brands were particularly active in entering new markets in 2017, which may point to the maturity of the U.S. market.
The most popular market for new entrants internationally was Hong Kong (the third year in a row) followed by Dubai, Taipei, London and Tokyo, which all attracted a minimum of 45 global retail brands, according to CBRE’s research.
Overall thirty-two global retailers entered the U.S. in 2017, including 14 businesses from Europe and 14 from Asia.
Leading the pack, was German grocer Lidl, which opened almost 50 stores across the U.S. though it had to slow its growth plan after a rapid start.
Least threatened by online competition is the coffee and dining sector, which accounted for 25% of retailers’ international growth last year, up 7%.
According to CBRE, as “traditional drivers” for new retail space dissipate, food and entertainment is filling the gaps, which means the mix of businesses in shopping centres will increasingly drift away from apparel and fast-food, to include a little bit of everything.