Bricks-and-mortar remains attractive to retailers, says CBRE

Bricks-and-mortar expansion remains an attractive prospect for retailers across Europe, with 72% of occupiers confirming they have plans for further expansion, according to CBRE’s 2024 European Retail Occupier Survey.

The report – which gathered responses from over 60 retailers with a combined global footprint of more than 130,000 stores – found that 71% of retailers which are planning to expand their bricks-and-mortar intend to do so in areas where they already operate.

The survey also found that larger stores are also in favour, with 72% of respondents looking to increase the size of their stores. This has shown a marked increase from CBRE’s findings in 2022, in which only 26% of retailers looked to upsize.

This search for larger stores is one of a few trends CBRE has observed, particularly across athleisure and fashion in gateway and capital cities. The firm has also noted an uptick in the own-to-occupy trend, whereby luxury retailers are showing an increasing desire to own their stores as opposed to leasing. However, leasing remains the predominant strategy for the mass market, with 84% of retailers stating that they have no plans to expand their store ownership.

Chris Gardener, CBRE’s head of European retail said: “Improved consumer confidence is starting to translate into higher levels of consumer spending, which is giving retailers confidence to commit to stores both in markets familiar to them, and new markets altogether. Brand loyalty is often enhanced through in-store experience, and this is where we see retailers really committing to store investments and using bricks and mortar to truly showcase their brand identity.”

When surveyed on which locations they would be targeting, retail parks dominated, with 45% of retailers selecting the format for their preferred future locations.

Overall, physical stores remain a core component of overall strategy, with 97% of respondents in agreement. The survey found consensus was that bricks-and-mortar is more effective than online retail for consumer engagement, cross-selling products, sales productivity, introduction of new products, and acquiring new customers.