London is the most targeted market for international retailers
London has reclaimed the number one position as the most targeted market for international retailers, according to latest research.
The 2012 edition of ‘How Global is the Business of Retail?’ by property advisers CBRE, mapped the global footprint of 326 of the world’s top retailers across more than 200 cities to identify trends in global retail expansion at national and local levels.
The report found that retailers expanded into a wide range of markets in 2011, with 74% of the countries in the survey seeing at least one new retailer enter the market last year. The overall global footprint of retailers grew 2.1%, similar to the previous year, which CBRE said demonstrates that retailers are continuing to grow their cross-border businesses in spite of a challenging consumer environment.
London reclaimed the number one position after sharing top spot with Dubai last year. Attracting more than half (55.6%) of all international retail brands surveyed, CBRE said the city remained a key hub for retailers looking to expand into Europe. The UK also retained number one position as the most penetrated global country with 56.7% of retailers in the survey having a presence there.
Peter Gold, CBRE’s head of EMEA cross border retail explained: "In the face of ongoing economic uncertainty, which looks set to remain a factor throughout 2012, retailers have responded by seeking to de-risk their expansion activities, generally choosing markets like the UK that are regarded as safe havens.
"London is generally the first port of call for global retailers, but once they have established a presence in the capital, they are willing to extend their reach into other major UK cities, as well as major regional shopping centres such as Trafford Park, Meadowhall and Bluewater."
While the survey found that Dubai still holds considerable global pulling power, it dropped into second position due to a handful of retailers exiting the market. New York stayed in third position while Moscow moved up the rankings to share fourth position with Paris ahead of Hong Kong. Kuwait City rose to eighth position from 12th place last year while the remainder of the top 20 comprised a mix of traditional and emerging markets.
When looking at the most targeted countries by global retailers, the UK held onto first position in the rankings closely followed by the United Arab Emirates and the United States. Spain was in fourth position followed by China while France and Germany came joint sixth. Russia, Italy and Saudi Arabia made up the remainder of the top ten.
North American retailers were found to be the most global with 73% present in all three regions (Europe, Middle East and Africa, Asia Pacific, The Americas), compared with 44% of European retailers and 23% of retailers from Asia Pacific. London was the number one city targeted by American retailers with 64.7% operating at least one store there, closely followed by Dubai and Kuwait City in third position.
Gold added: "The trend for US fashion retailers making strategic advances into the UK continued in 2011, building on the highly successful entries of several major US brands in recent years. This is largely because the US retail market is saturated and the language and cultural characteristics shared with the UK make establishing a brand and merchandising a store easier than in other European markets."
Further CBRE research into the number of new store openings in the past year revealed that Europe was the most targeted region at city level accounting for 48% of new entries, followed by the Middle East and Africa with 22%, and Asia with 14%. North America, Pacific, and Latin America attracted 8%, 6% and 1% respectively.
Almaty (Kazakhstan) was by far the most sought after new city last year with 18 new retailer entries. This was largely down to major infrastructure improvements and the delivery of new shopping centre space. In addition, the arrival in 2010 of the Inditex Group, which operates brands such as Zara, Pull & Bear and Massimo Dutti, encouraged other new entrants to the market. Other factors included the growth in average income levels and participation in the Customs Unions with Russia and Belarus.
The east European cities of Moscow (11 new entrants), Kiev (9) and Warsaw (6) were also key targets in 2011, as retailers focused their expansion plans on those markets with the most robust economies and best growth prospects.
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