Knight Frank: international retailer expansion into France moderating but crucial to market’s future

In 2018, 45 international retailers opened their first store in France. At a time when many retailers are putting a brake on expansion and lower in ambition, the contribution of these new international retailers is significant.

In total, the 225 international retailers which have arrived in France since 2014 have opened more than 1,000 stores, according to Knight Frank.  The flow of newcomers is expected to remain strong in 2019, with no fewer than 20 already recorded.

Since 2014 the undisputed leader has been Basic-Fit in France, with 92 openings in 2018 and nearly 20 in Q1 2019, for a total of 271 fitness clubs. Next come two Danish retailers – Flying Tiger and Sostrene Grene – and Dutch retailer, Rituals, according to Knight Frank research.

Unsurprisingly, 62% of new international retailers in France since 2014 chose Paris for the opening of their first store. However, this statistic masks a more nuanced picture.

Antoine Grignon, Head of Retail Services, France at Knight Frank, explains:

“Paris is especially attractive to luxury and high-end retailers. These focus almost exclusively on Paris for their first opening in France before deciding whether to open in one or more other regions. For other market sectors, Paris is not necessarily the first choice. Before 2014, Primark launched its conquest of the French market in Marseille, while Kiko partnered with Klépierre to open in rapid succession Val d’Europe (Serris), Belle Épine (Thiais) and Millénaire (Aubervilliers).”

This trend has been confirmed in recent years. Of the top 5 retailers which have arrived in France since 2014, and which today account for the largest number of stores, only Rituals chose Paris for its first opening. The others launched their first stores in Île-de-France (Basic-Fit, Sostrene Grene) or the provinces (Flying Tiger in Nice). 

The flow of new retailers is not about to dry up, says Knight Frank, which identified several important differences between the current wave of newcomers and previous ones. Openings and closings have accelerated, and expansion is not as steady or consistent as before.

Antoine Grignon, Head of Retail Services, France at Knight Frank, explains:

“France is still an attractive destination. The problem lies mainly in the significant changes that the retail sector has undergone. Retailers now develop more prudently, or they curtail expansion. They have not only seen other retailers get burned, but also must increasingly contend with numerous structural factors.

“The brick-and-mortar store opened on a long-term basis has become just one of many options available to brands for testing new markets. Pop-up stores, shop-in-shops, dedicated e-shops, etc. provide a wide variety of formats used by retailers to optimise their marketing and adapt their product offers to local market conditions.

“The rapid development of online shopping is undoubtedly the most decisive factor. In certain business sectors, it provides flexibility for retailers, allowing them to fine-tune their network of sales points and to place their physical stores in the most strategic and profitable locations.”

james.wallace@realassetmedia.com