CBRE: Retailers Expanding Stores Despite E-Commerce

Retailers are expanding stores internationally this year despite growing online shopping, with a greater percentage eyeing growth in the Americas than last year, reported CBRE Group, Los Angeles.

CBRE said 25 percent of retailers surveyed plan to expand in the U.S. this year, up from 21 percent last year. The survey results hinted at a positive correlation rather than an adversarial one between growing online sales and retailers expanding their brick-and-mortar stores. Specifically, 83 percent of respondents said their store-expansion plans will not change in 2016 because of e-commerce.

“Retailers are becoming smarter and more efficient in their site-selection process, and a lot of that comes from e-commerce,” said CBRE Senior Managing Director Brandon Famous, noting that data from online sales can tell retailers where to place their brick-and-mortar stores.

“Retailers’ success rate now is much stronger because they have much better information about their customers,” Famous said.

In naming their greatest concerns for 2016, only 22 percent of responding retailers listed “stiff competition from online retailing,” CBRE said. That ranked behind five other concerns including real estate cost escalation (56 percent) and unclear economic prospects (42 percent).

The survey also revealed that 17 percent of respondents plan “aggressive” expansions–40 or more new stores globally–in 2016, up from 9 percent in last year’s survey. Most respondents (67 percent) intend to open up to 20 stores this year.

Respondents ranked the most common shopping-center formats they prefer as street shops (76 percent), regional shopping malls (72 percent), open-air centers (45 percent), transit hubs (20 percent) and outlet centers (18 percent).

The U.S. offers international retailers an ideal mix of population and income, CBRE said. But some international retailers find the varied markets outside of U.S. gateway cities puzzling in some cases.

“If you’re in the fashion business, the U.S. customer is quite different once you get outside of the big, cosmopolitan cities like New York,” said Mark Burlton, Global Executive of CBRE’s Retail Representation team. “Even on-trend brands have struggled in places like Chicago, where the customer is more conservative. The U.S. is a big, wealthy country with a lot of great cities, but you have to approach it with a bit of caution until you know what you’re getting into.”