Supply and demand in retail: the changes
The retail segment will undergo a very strong change. Both on the demand side but also on the supply side. Across Europe there are difficulties and there will be. But this is not the point. The changes will mainly concern the areas around the so-called 'shopping streets'. But to give a clearer picture of the situation, we decided to focus more on this topic. So, after analyzing in detail the studies reported by the experts, we indicate the changes related to this sector.
Let's start with the answer to the most popular question. What will be the consequences that will affect the retail next to the most luxurious shopping streets?
First of all, three categories of roads must be distinguished: those of the mass market, those of luxury and that of affordable.
In the first case we speak of a varied catchment area. Which means that, however, there will be a need to keep the real estate's availability to contain demand in the existing structures high. And, in some cases, to expand them. An increase by the offer is therefore assumed.
In the second case, however, as is well known, there is talk of an untouchable segment. Retail related to luxury shopping streets will probably remain unchanged. Elite customers will not miss, given that this segment causes 80% of sales volumes in each country.
The last category, on the other hand, is the least analyzed. The least obvious. There is talk of the shopping streets occupied by niche brands which, as such, are extremely sensitive to changes.
In short, there will be changes, but to what extent? The main problem is that related to the dimensional aspect. The fixed costs for keeping a commercial space of an important surface in operation are higher than the standard ones. The solution will be to move online, affecting the world of offline (and therefore real estate).
In fact, the total closure of many businesses is not excluded. It is not possible to locate a more or less acute crisis, as far as retail is concerned, between the various European and non-European countries. This is because the diffusion of the brands, especially the best known ones, is extended across the border in a fairly homogeneous way.
In conclusion, a more marked change in the affordable and in the mass is assumed (the latter difficult to decipher considering the size of the demand).
It is hoped that this critical period will be as impactful as possible for the real estate market (also taking into consideration the retail segment). For the moment, a return to normal, even gradual, is expected.
We at Realigro will continue to keep our readers updated, in order to be able to analyze real estate not only for the rental market and residential sales. But also for all the apparently secondary aspects of real estate but which, as we have seen, represent a focal point for the whole of society.
Let's start with the answer to the most popular question. What will be the consequences that will affect the retail next to the most luxurious shopping streets?
First of all, three categories of roads must be distinguished: those of the mass market, those of luxury and that of affordable.
In the first case we speak of a varied catchment area. Which means that, however, there will be a need to keep the real estate's availability to contain demand in the existing structures high. And, in some cases, to expand them. An increase by the offer is therefore assumed.
In the second case, however, as is well known, there is talk of an untouchable segment. Retail related to luxury shopping streets will probably remain unchanged. Elite customers will not miss, given that this segment causes 80% of sales volumes in each country.
The last category, on the other hand, is the least analyzed. The least obvious. There is talk of the shopping streets occupied by niche brands which, as such, are extremely sensitive to changes.
In short, there will be changes, but to what extent? The main problem is that related to the dimensional aspect. The fixed costs for keeping a commercial space of an important surface in operation are higher than the standard ones. The solution will be to move online, affecting the world of offline (and therefore real estate).
In fact, the total closure of many businesses is not excluded. It is not possible to locate a more or less acute crisis, as far as retail is concerned, between the various European and non-European countries. This is because the diffusion of the brands, especially the best known ones, is extended across the border in a fairly homogeneous way.
In conclusion, a more marked change in the affordable and in the mass is assumed (the latter difficult to decipher considering the size of the demand).
It is hoped that this critical period will be as impactful as possible for the real estate market (also taking into consideration the retail segment). For the moment, a return to normal, even gradual, is expected.
We at Realigro will continue to keep our readers updated, in order to be able to analyze real estate not only for the rental market and residential sales. But also for all the apparently secondary aspects of real estate but which, as we have seen, represent a focal point for the whole of society.
