Affluent Nordic cities are attracting international retailers as they broaden EU expansion plans, Jonathan Bayfield explains why.
Louis Vuitton, Michael Kors, Boggi and Superdry: these are just a few of the international brands that have expanded across the Nordics in recent years with JLL’s guidance.
As economic conditions improve across the Eurozone, retailers are entering these markets as part of their European expansion plans as they search for growth and diversification.
Oslo, Copenhagen, Helsinki as well as the Swedish cities, Stockholm, Gothenburg and Malmö, are among Europe’s most affluent cities and, buoyed by strong online sales, resilient currencies, young populations and mature economies, these cities offer abundant opportunities for retailers.
In addition, a high degree of market maturity, resilience, growth prospects, real estate transparency and low risk add to their appeal.
We have delved deeply into the inner workings of the Nordic region in our latest research report, Destination Nordics. An increasing number of international retailers are overcoming traditional market barriers, such as the distribution networks and the four different local currencies, to enter the Nordics.
In fact, for some retailers the use of different currencies has become a welcome diversification of risk with regards to their operational income.
Purchasing Power per Capita vs Retail Sales Growth
One of my housemates from University migrated to Stockholm over a year ago with his girlfriend and started working for one of the international retailers in the city centre. Coincidental that he did, as Stockholm actually tops our rankings in terms of cross-border retailer attractiveness for the region!
But it’s not just Stockholm that’s attractive to international retailers, as all the key Nordic city retail markets are on the rise. Whilst international brand penetration in the Nordic markets is still relatively low in comparison with other key European markets, new fashion entrants have been embraced by local shoppers, like my good friend, resulting in healthy sales.
A group of us plan to visit my friend and his girlfriend this summer and I am very much looking forward to witnessing some great examples of retail innovation the region has to offer such as Mood Stockholm shopping centre, which has now become a popular destination thanks to its sophisticated food and beverage offer, which JLL’s Food Service Consulting Team advised on. In addition, the anticipated opening of 100,000 sq m Mall of Scandinavia at the end of the summer is likely to raise the bar even higher!
Whilst the international brand penetration in these Nordic markets is still relatively low in comparison with other key European markets, there’s no doubt that they’re on the rise. New fashion entrants have been embraced by local shoppers, resulting in healthy sales.
Success ultimately relies on finding the right space, in the right place, and on the right terms. My colleagues have already helped a number of international retailers including Louis Vuitton, Michael Kors, Boggi and Superdry to expand across the Nordics and are demonstrating some great progress. Good luck to the next wave of retail and leisure operators looking to grow in this region!