Despite of increasing costs and uncertain economic conditions, global retailers are still focusing on international expansion, according to a new survey. While the report highlights the activity among businesses, it also examines the most popular destinations for expansion in 2015 and the UAE ranks 27th most preferred market for retailers.
The survey “How active are retailers globally?”, conducted by global property consultancy CBRE looks at the retailers who plan an international expansion in the coming year. The report examines the issues facing retailers based in Europe, Middle East and Africa, the Americas, and Asia Pacific, as well as the number of stores they want to open and the key markets they target in 2015. Out of 64 markets around the world, the United Arab Emirates ranks 27th in the list, sharing a place with Slovakia, Saudi Arabia, and Denmark. Only 8% of the retailers surveyed in the study said they were planning an expansion in the UAE.
Germany retains its top position for a second year in a row, with 40% of retailers targeting the country. According to researchers, its attractiveness is due to the opportunity to open a store in more than 30 large cities with high purchasing power. Germany is closely followed by the UK with 33% and France with 31% of retailers planning expansion there. Along with these three countries, which are currently the most popular markets (with over 30% of retailers preferring them), China steps out as the fourth most attractive destination (28%), followed by Spain (23%), Hong Kong (22%), Italy, Netherlands and United States with 21%, and Belgium (20%) at the 10th position.
While Germany is the top market for retailers, based in Europe, Middle East and Africa regions (EMEA), retailers in the Americas and Asia-Pacific (APAC) are targeting South Korea. And 43% of American retailers are looking to Japan, China, and Hong Kong. Retail brands, originating in Germany, UK, US, and Italy are the most active with 16% of them looking to expand overseas. Only in Italy, 11% of retailers look to expand their businesses. According to the results of the survey, 85% of luxury and business fashion retailers are targeting the Americas and Asia-Pacific region, while 78% of mid-range fashion retailers prefer markets in the EMEA region. And 67% of coffee and restaurant brands are looking at APAC.
As for the biggest concerns for expansion in 2015, 47% of retailers state they are facing cost escalation and unclear economic prospects. For retailers based in the Americas, however, this would be the lack of quality retail space, with 57% of brands pointing it as their largest concern.