The retail trade in Germany and worldwide has not had and does not have it easy: first the corona pandemic changed the framework conditions for trade and especially for expansion, and now inflation and the associated subdued consumer sentiment are posing further challenges. However, the white paper “Expansionstrends 2022” by the EHI Retail Institute came to the conclusion that despite everything, half of the companies are currently aiming to expand their branch network.
“Despite the high construction, modernization and ancillary costs, at least every second company wants to expand its branch network. The drugstore, health & beauty, furniture, hobby & leisure, gastronomy and general needs sectors, which also include non-food discounters, are particularly expanding,” commented Lena Knopf, project manager for the research area of retail real estate and expansion at EHI, in a statement.
This year, 72 sales lines, which together have around 27,000 branches, took part in the online survey conducted by the Hahn Group. The white paper is therefore intended as a picture of the mood among those responsible for expansion in retail, gastronomy and chain services in Germany.
Overall, half (51 percent) of those responsible for expansion stated that they had more locations at the end of the year than in the previous year. A quarter (25 percent) will continue to operate a stable number of locations, while another quarter (24 percent) are in the process of reviewing and downsizing the branch network.
“This primarily affects companies from the consumer electronics & telecommunications, shoes & accessories and clothing sectors – and is a trend that has been going on for several years,” explains the institute.
Mixed sales expectations for the second half of the year and the future
As far as sales expectations for the second half of the year are concerned, the picture is mixed: a good third (38 percent) of the retailers surveyed expect sales to increase compared to the same period last year, while almost a third (31 percent) expect sales to fall. Another almost third (32 percent) trusts in stable sales.
For the future, most retailers (70 percent) expect that the previously crisis-proof retail parks will continue to develop positively and benefit as a location. Many people responsible for expansion are also assuming a positive development in district locations (48 percent).
“The advantages are that the proximity to the local population and the mix of different reasons for visiting generate a stable frequency. Retailers are skeptical about secondary locations in regional centers and especially shopping centers. There is an urgent need for new and fresh strategies to make these locations sustainable through sensible design and use,” advises EHI.
Clues can be popular co-use types at mixed-use locations, such as apartments, which are the most popular from a retail perspective (59 percent), followed by gastronomy (48 percent), medical facilities (46 percent) and leisure & entertainment (42 Percent).
“While most types of use are rated fairly consistently year-on-year, leisure and entertainment offerings in particular have made a leap up in retailer ratings this year. After all, last year only one in three respondents saw this as a positive impetus,” summarizes the EHI Retail Institute.