Saturday, 15 March 2025
A new survey from CBRE highlights a resurgence in physical retail as major brands accelerate expansion plans across Europe. The findings from the 2024 European Retail Occupier Survey reveal that nearly three-quarters of participating retailers are poised to increase their portfolio of brick-and-mortar stores, a significant jump from previous years.
According to the study, which gathered insights from over 60 global retailers operating more than 130,000 locations, 71% of respondents are looking to expand their physical store presence in markets where they are already established. This growing emphasis on physical retail is underscored by a notable increase in the desire for larger store formats, with 72% of retailers expressing intentions to enlarge their space—a sharp rise from just 26% in 2022.
The trend towards larger retail spaces is particularly pronounced among fashion and athleisure brands in major urban areas. Interestingly, while luxury retailers are increasingly opting for store ownership over leasing, the mass market remains focused on leasing strategies, with 84% of retailers indicating no plans to purchase properties.
Chris Gardner, Head of European Retail at CBRE, commented on the findings, stating, “Improved consumer confidence is starting to translate into higher spending, giving retailers the confidence to commit to stores in both familiar and new markets. Brand loyalty is often enhanced through in-store experiences, which is driving significant investments in physical retail to showcase brand identities.”
Retail Parks are emerging as the preferred choice for future store locations, with 45% of respondents favoring these formats. The appeal of Retail Parks is bolstered by high foot traffic from local residents, ample free parking, and a concentration of similar retailers, all of which contribute to enhanced store performance.
From a technological standpoint, retailers are currently in an exploratory phase regarding Artificial Intelligence (AI). While 61% of survey participants are investigating AI applications, only 25% have successfully implemented such solutions thus far.
Environmental, Social, and Governance (ESG) considerations are also gaining traction, with 60% of retailers expecting “green” building features to become advantageous in leasing negotiations over the next three years. This marks a 45% increase since 2022, signaling a shift towards more environmentally conscious contracts.
The study underscores the pivotal role of physical stores, with 97% of respondents acknowledging their importance in retail strategy. Retailers agree that brick-and-mortar locations significantly outperform online platforms in terms of consumer engagement, cross-selling opportunities, and overall sales effectiveness.
Carmen Ravon, Head of Retail Occupiers CEE at CBRE, concluded, “The significant desire for larger stores and the appetite for expansion across both new and existing markets bode well for the retail landscape in 2025. The faster retailers can implement AI solutions, the more they will enhance both store profitability and the shopping experience. I extend my gratitude to the retailers in CEE and EMEA who participated in our study; their insights are invaluable as we look towards the future.”
