Pan European Retail Agency
Having landed safely on British soil and back into the swing of normal – non-conference life – I have been asked by my colleagues what the sentiment at Mapic was like. JLL’s latest research suggests, and pardon my crude summary, that we have observed burgeoning success of the emerging growth markets and these markets provide some attractive expansion opportunities for retailers with established growth strategies.
A perfect example is Swedish retailer H&M. Ranked second, just below Zara in terms of % of coverage across Europe’s key markets, it currently has a presence in 96% of markets covered. With plans to open stores in Mexico, Malaysia and Kuwait over the next 18 months, H&M clearly has its sights on furthering its global coverage. This resonates loud and clear that retailers with a strong and translatable position should and clearly are exploring international expansion.
However, even though there is little doubt that European retailers understand the huge opportunity in the emerging markets, such as the BRIC countries, from the discussions I had at MAPIC retailers are realising that entering these markets with multiple stores is not as easy as first anticipated and there are several reasons for this, including high property costs, high land values, political difficulties and logistical issues. The European retailers that I met in Cannes are hence re-focusing on their core portfolio of stores in prime shopping centres and on the high streets, which is encouraging news for all those involved in the European retail market.
To summarise, the opportunity for retailers to grow their portfolio is inevitable in the emerging markets, but it is essential that they do not forget their core markets!