The corona pandemic has significantly changed the framework for retail expansion. With the developing inflation and the associated weak consumer sentiment, there are further challenges for the retail trade in Germany. Nevertheless, according to the EHI white paper “ExpansionTrends 2022”, half of the companies are currently aiming for branch expansion. “Despite the high construction, modernization and ancillary costs, at least every second company is striving to expand its branch network. The drugstore, health and beauty, furniture, hobbies and leisure, gastronomy and general needs sectors including non-food discounters are expanding particularly strongly,” says Lena Knopf, research area and expansion of retail properties. For project managers. EHI.
Revenue Expectations: Business with Mixed Feelings
Overall, 51 percent of those responsible for expansion stated that they had more jobs at the end of the year than in the previous year. 25 percent continue to operate similar locations, 24 percent of the sales departments are in the process of testing and reducing their branch network. Companies in the areas of consumer electronics and telecommunications, shoes and accessories as well as clothing are particularly affected – and have been for many years.
Regarding sales expectations for the second half of the year, the retailers in the survey presented a mixed picture. A majority of 38 percent expect sales to increase compared to the same period last year, while 31 percent expect sales to decrease. 32 percent believe in stable sales.
Positive growth forecast for retail parks and district locations
In the foreseeable future, a majority of retailers (70 percent) expect that the formerly crisis-proof retail parks will continue to grow and benefit as a location. Many expansion managers also attribute a positive development to the district locations (48 percent). The advantage is that the proximity to the local population and a mix of different commuting reasons results in a stable frequency. Retailers are skeptical about secondary locations in regional centers and especially in shopping centers. There is an urgent need for new and innovative strategies to make these spaces sustainable through meaningful design and use.
Clues can be, for example, popular types of joint use in mixed-use locations. While housing is the most popular from a retail perspective (59 percent), restaurants (48 percent), medical facilities (46 percent) or leisure and entertainment (42 percent) are also popular in the neighborhood. While most types of use are rated fairly consistently from year to year, leisure and entertainment offers in particular have seen a jump in retailer ratings this year. After all, every third person questioned last year saw this as a positive incentive.
The white paper “ExpansionStrands 2022” is a picture of the mood of those responsible for the expansion in retail, gastronomy and chain stores in Germany. The EHI conducts annual online surveys on behalf of the Hahn Group. The results were published both in the Hahn Retail Real Estate Report and in the EHI Whitepaper Expansion Trends. A total of 72 sales lines with a total of around 27,000 branches took part in the online survey this year.