U.S retailers are the most active when it comes to global expansion while Tokyo is the hottest target market for new entrants, says the latest report from CBRE Group Inc.
The report—which tracks the target markets of new brands in 164 cities in 50 countries—said U.S. retailers accounted for 26 percent of cross-border expansion, while Italy trailed behind in second place accounting for 14 percent of cross-border expansion in 2014. U.K.-based retailers accounted for 11 percent and French retailers ranked fourth with 10 percent.
The 2014 “How Global is the Business of Retail?” report also found that the primary expansion targets for retailers in the American markets are Asia (41 percent) Europe (33 percent), and the Middle East and Africa (12 percent).
Tokyo, winning the top rank as most popular market for retail expansion, attracted 63 new brands last year due to strong leasing momentum in core areas and “despite mixed signals in the economy and an increase in the sales tax to eight percent in April 2014,” said the report. Toronto was another stand out market, attracting 25 new international brands in 2014.
Regarding overall expansion by sector, mid-range fashion retailers were the most active globally (21 percent) while luxury retailers targeted the Americas (26 percent) and Asia Pacific (24 percent).
Globally, Europe accounted for 42 percent of retailer expansion, followed by Asia with 39 percent and the Middle East and Africa with 10 percent. North America was a target for only 3 percent of retailers.
“The core elements of globalization, technology and demographic change, continue to have a dramatic impact on the business of retail. Demographic shifts in many countries have resulted in changes in both spending power and shopping habits. Technology enables retailers to enter markets and evaluate performance more swiftly,” said Brandon Famous, senior managing director of Retail Occupier Advisory & Transaction Services at CBRE. “Consumer traveling patterns mean that many brands are well known before they even enter a market and the pent-up demand for the chance to purchase locally creates a ready-made market before entry.”