The 2014 report which tracks retailer’s movements in 2013, found that the overall footprint of global retailers at country level grew by 1.7%. Over half of retailers (51%) are now present in all three major global regions, The Americas, Europe Middle East and Africa (EMEA) and Asia Pacific, a slight increase on the previous year.
Retailers focused on fewer and larger markets in 2013 with 18 of the top target cities considered mature markets compared with only 14 the previous year. 83% of the survey cities saw at least one new entrant throughout the year (compared with 81% the year before); with the top target markets seeing a 28% rise in new entrants.
The number of new entrants at city level was up by 26% year-on-year, with an increasing number of retailers crossing borders to grow their businesses. Paris has risen in popularity among the cities most attractive to retailers welcoming 50 new entrants over the year, including 10 new Luxury & Business Fashion Brands. Paris benefitted from three new shopping centres in 2013, but it was the prime high street locations that attracted most global brands. Competition on these high streets between luxury brands is fierce due to surging demand from tourists, especially from China.
France also topped the table of the hottest countries ahead of Japan and Hong Kong. France has seen a renewed confidence in the market. Paris was the main point of entry for many retailers and has seen rents increase to decade highs due to significant interest from global retailers for the limited amount of available prime space. Paris was not the only target market; retailers also chose nine other French cities for their first store.
Tokyo is second as the most attractive city for global retailers, seeing double the number of new entrants during 2013 (48) than it did in 2012, reflecting renewed confidence in the economic prospects of Japan. Half of all new entrants (24) came from the US while a further 18 were from Europe. Hong Kong and Abu Dhabi were the third and fourth ‘hottest’ markets with 43 and 42 new entrants respectively.
London is the home of more international brands than any other city, yet it still attracted 31 new market entrants last year.
According to the new rating How Global is the Business of Retail, Moscow was the 7th most active market in terms of international brands’ new entrances in 2013. Russian capital observed the same intensiveness of activity as London and Shanghai. New entrants work in all price segments, though the number of new luxury brands declined compared to the previous years. 60% of international chains, which entered Moscow market, are European by origin, 35% - from USA, and the last 5% - 2 Japanese brands: Marukame and Miki House. 24 new retail chains opened their first stores in the shopping malls. Fashion retailers were especially addicted to this trend. Vast majority of new international brands entrances was realized via shopping and entertainment centers Afimall City, Mega Belaya Dacha, and Atrium.
At the same time Moscow continued improving its position in terms of amount of famous international brands already working in the city. Russian capital entered top-3 world cities in this regard, being behind just London and Dubai. By the end of 2013 45% of international chain retailers had their stores in the city, same as in New York.
In 2014-2015 we expect to see around 1,2 mln. m² of new supply of quality retail space. Such remarkable schemes as Avia Park, Columbus, Mozaika, Vegas Crocus City will see the market. These new opportunities will incentivize further interest of international players to the Moscow retail market. Despite significant economic and geopolitical instability, observed in Jan – May 2014, 14 new international chains have already entered Moscow market in 2014. At least, 16 other foreign players announced their plans to enter till the end of 2014.
Retailers from the Americas are by far the most global with 80% present in all three regions compared with 48% of European retailers and 25% of Asia Pacific retailers. The maturity of the American market has encouraged retailers to cross borders and to extend their global reach in order to grow their companies. US retailers expanding into EMEA represented 40% of cross-border movements by American retailers, 35% were entries into Asia, and only 18% were entries into other countries in the Americas region.
Source: CBRE
