Colliers International is predicting it will be a further seven years before there is a rebalancing of the physical and online retailing sectors across Europe.
”We are seeing a significant slow-down in e-commerce growth and we believe that the market-share achieved by online retailing in the UK – which is about 27 percent – is not going to be repeated elsewhere in Europe. For all European sub-regions, we expect 2025 to be a watershed year as e-commerce spending reaches a point of maturity across these territories, ”Colliers Co-Head of EMEA Retail, Etienne van Unen, comments.
Colliers specialists estimate that future demand for retail space will either come from new retailers or the online giants – neither of which have the 20th-century legacy problems of huge store networks and the crippling costs that these can entail.
E-commerce will also evolve in the coming years and have a closer relationship with in real life shopping. Amazon’s offer is fundamentally shifting from its roots as an online retailer towards being a third-party provider of tech, fulfilment and physical stores in which it will curate a wide and responsive range of brands and products.
“Amazon is set to reinvent the concept of supermarkets and department stores for the 21st-century and in doing so will become one of the world’s largest occupiers of retailing space, ”van Unen concludes.
While these transformations take place, real wage growth is forecast to help drive discretionary retail spending by around 3.9 percent per annum across Europe during the next five years. However, this is not going to provide much respite for beleaguered in real life retail property landlords.
“This wage growth and increase in spending will not on its own ride to the rescue of the physical retailing sector as it is unlikely to translate into any real uplift in demand for space. The retail property sector cannot sit around and simply wait for online growth to diminish and for the big internet brands to start opening more stores. Drastic action is needed. Redundant retail space must be eradicated through demolition or being repurposed into residential and other alternative uses, ”said Colliers Co-Head of EMEA Retail, Paul Souber.