Retail trend of the last week (20–26.07.09)

Last week, an influential American magazine Forbes, has published a ranking of the cities most attractive for international retail chains.

The rating has defined 280 world’s largest retailers – Givenchy, Prada, Gucci, Versace, Zara, Metro, Adidas, etc. The first line of the present rating is occupied by London – 166 out of 280 largest retailers are represented in the city. Paris is situated on the second position (139 companies); New York holds the third line (131 companies). The TOP-5 also includes Dubai and Madrid (128 and 128, respectively). Barely 119 retailers are represented in Moscow. The TOP-10 is tailed by Berlin, Munich and Tokyo.

If London continues to be the most attractive region for retailers, the same cannot be said of the UK as a whole. According to British Retailers Consortium (BRC), 12% of British businesses are vacant at the moment. In early 2009, the retail space vacancy level on the main streets of the UK has amounted to 7%. According to specialists, 15% of British shops will be left without tenants by the end of the year.

This trend is mainly due to the ongoing recession and the growing popularity of shopping malls.

The recession leads to an increase of retail space vacancy level in New York. Currently the rate works out 6.5% there. According to forecasts the indicator will reach 10% by the next year.

The level of retail space vacancy on Fifth Avenue, one of the main shopping streets in the city, has amounted to 15.3%. Every tenth store is already closed or about to close in the area of SoHo known for its boutiques, art galleries and restaurants.

During the period of recession, shopping malls also cannot be called the “islands of stability”. For example, since the beginning of 2009 barely two shopping malls have been commissioned in Bulgaria - Mall Plovdiv in Plovdiv and Bourgas Plaza in Bourgas. Their combined floor area amounts to 46 thousand sq. m. Several more shopping centers are currently being built in the country.

However, the number of projects in this segment, which have been shelved because of the financial crisis, is also growing. Evropa Park, Sofia Acropolis, Tsarigradski Mall, DLS Mall Sofia, Grand Galeria Mall Bourgas, two shopping malls in Pazadzhike and a number of other shopping centers are among the projects affected by the crisis.

Author: Alexey Lahov