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Retailers’ store plans undeterred by e-commerce

Amazon-books2Online retailing will not deter retailers’ physical store expansion plans in 2016 as overseas retailers look to grow their presence in Australia, according to the latest CBRE report.

The report, which saw 150 international brands surveyed, found 83 per cent of brands do not expect their physical store expansion plans to be affected by the growth in e-commerce this year, with 22 per cent of brands showing concern about growing online sales.

Among the respondents, 17 per cent of retailers are looking to open over 40 stores this year, up from 9 per cent in 2015. 67 per cent of respondents indicated they plan to open up to 20 stores.

“Despite the popularity of online shopping growing year on year, a physical store presence in key locations is still seen as critical for maintaining a strong brand presence,” said CBRE Pacific head of retail tenant representation, Tim Starling. “Shoppers still feel a need to go into a physical store, physically touch a product and enjoy the brand experience.”

China is the top Asian market, with 27 per cent of retailers looking to expand there. Australia takes 11th place on the global list, with 19 per cent of retailers looking to grow their presence in the country.

“We are witnessing the strongest levels of international retailer enquiry in Australia to date and we believe we are only partway through this cycle. The two stand-outs are the luxury and the premium fashion sectors,” said CBRE’s national retail director, Alistair Palmer.

Germany topped the list for store expansion, with 35 per cent of retailers looking to grow their presence there. France is next on the list, with 33 per cent of retailers thinking of opening physical stores in the country, with the UK third. The report indicated the three countries “are home to cities with good spending power and steady levels of tourism.”

Street shops, 76 per cent, and regional shopping malls, 72 per cent, were cited as the most popular formats for expansion with an increasing number of brands looking to travel hubs.

“The challenge now is for retailers to build an engaging offer that encourages people to stay longer and spend more,” said Starling.

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