Through our analysis of 334 global retailers, we found that expansion activity increased only marginally by 0.4% year-over-year. This can, in large part, be attributed to economic shifts and new technologies, resulting in caution amongst retailers to not over-expand. These changes are forcing retailers to rethink their portfolios, prioritizing omnichannel strategies that connect front-end brick-and-mortar with back-end distribution with technology at the core. However, research found that retailers see the physical store footprint as fundamental to their overall growth strategies.
New entrant activity has been largely focused on Europe and Asia, primarily driven by home-grown brands who are capitalizing on opportunities within their own region. Overall expansion into Asia increased by 8% last year, largely due to increased focus on Asia by retailers from the Americas.
The Coffee and Restaurant category was a key driver of global retail expansion in 2017, accounting for 25% of overall activity, up from 16% in 2016. This has been driven by the evolution of consumer shopping habits that are increasingly blurring the lines between retail and leisure. Food and beverage retailers are taking advantage of this shift, positioning themselves as destination-worthy venues in the overall retail landscape.
Dubai tops the ranks for international retailer penetration with 62% of retailers surveyed maintain a presence in the city. Retailers are, and will always be, attracted to tried and tested locations; locations which offer a global audience, strong foot traffic, and an affluent local and tourist population. New and existing brands will continue seeking out these global cities for strategic expansion.