LONDON — People just can’t get enough of in-store shopping, especially for fashion and beauty, according to Cushman & Wakefield’s latest European Retail Radar report.
In the first six months of 2023, fashion brands leased the most shop space compared to any other type of retailer. The brands accounted for more than 40 percent of retail floor space leased across Europe by Cushman & Wakefield.
The real estate services firm said it analyzed nearly 1,000 retail real estate transactions across Europe and found that the majority of the deals were made by mass market fashion retailers.
Other brands fast opening doors across the region include the French down-jacket retailer JOTT (Just Over the Top) and the U.S. sportswear retailer Lids.
Fashion also accounted for the largest share of leases for bigger spaces — larger than 11,000 square feet — in the period.
Cushman said fashion accounted for almost one-third of all deals for all unit sizes but, for the largest units, it represented more than 40 percent of deals.
Other retailers going for larger spaces tended to be home and do-it-yourself, mixed goods and leisure brands.
“The pessimistic cries about the demise of brick-and-mortar retail now feel like a distant memory as physical retail enters a new norm,” said Rob Travers, head of Europe, the Middle East and Africa Retail at Cushman & Wakefield.
“While core retail sectors continue to dominate transactional activity, emerging trends are bringing new brands into the marketplace. Our analysis clearly shows that physical retail remains vital as brand touch points, supporting customer engagement and a wider range of business activity. And retailers continue to become more demanding of their retail real estate,” Travers added.
Looks from French casual brand JOTT, or Just Over the Top.
Courtesy Photo
The report said the food and beverage sector was the second most active in terms of the number of transactions in the period.
F&B accounted for 17 percent of the total number of deals done, and represented 8 percent of the total volume of space let, slightly up from volumes in the corresponding period last year.
Operators committing to space included the Belgian casual dining chain Hawaiian Poké Bowl and the U.S. chicken fast-food chain Popeyes, which continues to expand in Europe.
Health and beauty operators, particularly premium brands, were also highly acquisitive in the first half of 2023 with the volume of space transacted almost twice that of the corresponding period last year.
Jo Malone, Aesop, Freshly Cosmetics, MAC and Space NK have been particularly active, according to the report.
Cushman added that activity in the six months was dominated by demand for small units.
Across the entire sample of nearly 5,000 transactions since the beginning of 2021, more than 80 percent of deals were for units of less than 6,500 square feet, with the smallest units of less than 2,200 square feet accounting for more than half of all deals.
Cushman also looked at the reasons behind the spike in demand, and found they were a desire to create experiences, and to show off automotive innovations.
The report pointed to recent openings by Paradox Museum and Museum of Illusions in places such as London, Hamburg, Barcelona, Athens, Budapest and Dublin.
It also mentioned the Netflix “Stranger Things” installation in Milan, and the “Friends” Experience of interactive sets inspired by the TV show in cities across Europe.
The Lids U.K. storefront.
The report said as consumers become more demanding of new and exciting in-person experiences, culture and entertainment-based experiential brands are expected to require more space on both shorter- and longer-term bases.
It added that electric car companies such as Lucid, Polestar, HiPhi, Vinfast and NI0 have all invested in new retail spaces in recent years. Others — such as Chinese vehicle makers BYD and Xpend as well as U.S. giant GM — are planning to launch or expand in European markets in the near term.
The retail spaces they are typically creating include vehicle showroom space and areas that create “brand discovery and customer engagement in different ways,” Cushman said.