How has the retail landscape changed in the last four years? It deflated, according to an analysis by Locatus. The number of stores has fallen in both Belgium and the Netherlands, while vacancy rates have risen.
The number of outlets continues to fall
The digitisation of retail has left its unmistakable mark on high streets: the number of passers-by in the busiest shopping areas in the Benelux has been falling year after year since 2010. In the Netherlands, the decline is even more than 20 %; in Belgium, store visits by customers have dropped by 5 %. To make matters worse, those numbers do not even take the effects of Covid-19 into consideration.
There are also fewer physical stores today, both in Belgium and in the Netherlands. The Belgian trend is more pronounced, with a steady decrease in the number of sales outlets across the board. In the Netherlands, the growth in the hospitality industry compensated for store closures for a long time. However, in that industry as well, it seems the maximum has been reached.
At the beginning of this year, there were 2.1 % fewer stores in the Netherlands compared to 2017 – including the hospitality and other non-retail industry. In Belgium, there was a decrease of 3 %. In Luxembourg, however, the number of retail outlets grew by 4.5 % as several large retail projects were constructed. Data agency Locatus expects the number of (used) retail properties to decrease even more in the coming years.
Netherlands: limited vacancy rates
The categories that suffered the biggest cuts in Belgium and Luxembourg were fashion stores and stores operating within the ‘Leisure’ industry. There are also significantly fewer home furnishing and hardware stores than four years ago. In the Netherlands, on the other hand, the distribution across the various categories remains almost the same.
One thing that did rise sharply was the vacancy rate: in Belgium, it increased from 9.6 % in 2017 to 11.8 % now. In the Netherlands, the increase is considerably less: from 7.2 % to 7.5 % – again mainly because the hospitality industry has taken over a large proportion of empty premises. Retail properties have also been converted into homes or offices. As a result, in most Dutch provinces the figures remained similar, except for Limburg, Flevoland and North Holland where vacancy rates skyrocketed.
Luxembourg takes the lead
Belgium has also made an effort to convert excess commercial premises – as seen in the decrease in the number of sales outlets – but this effort has largely been cancelled out by the fact that, in the meantime, additional construction has taken place in the suburbs. As a result, vacancy rates have increased in all provinces. Antwerp (11.3 %) and Flemish Brabant (10.2 %) suffered the smallest increase, but these provinces were already close to the national average.
In Luxembourg, however, there seem to be more store premises than necessary: the small country has the biggest increase in vacancy rates, from 6.9 % to 9.2 %. “The construction of new shopping centres in this country has led to a considerable increase in the number of sales outlets. This seems too much for the market”, Locatus analyst Björn Jansen notes. Indeed, the total retail floor space increased by no less than 21.4 % in four years’ time. In Belgium, the total retail floor space increased only slightly over the past four years, by 2.4 %. The situation in the Netherlands remained fairly stable, with a very slight decrease of 0.7 %.
More retailers with less
Today, in all of the three countries there is a greater variety of active retailers. The Netherlands added 4.7 % of new retail formulas, Belgium and Luxembourg even more than 9 %. However, these chains are currently operating with 2.5 % fewer shops. In Luxembourg alone, there are 14.4 % more stores belonging to a chain, and the retail landscape has also been further taken over by chains: nearly a quarter (24.8 %) of all physical stores now belong to a retail chain. That is 2.2 % more than in 2017 and above the average of both the Netherlands (23.3 %) and Belgium (18 %).
In other words, the retail landscape today has to make do with both fewer visitors and fewer stores. The matching of supply and demand could perhaps be even better, as in some locations – especially in the suburbs – the floor space continues to increase, while in other places, vacancy rates are rising. In the Netherlands, an increase in the number of bars and restaurants managed to absorb vacancy for a long time, but since the Covid pandemic, the search for new solutions will undoubtedly continue. Could the integration of other services and forms of non-retail trade be a solution to bring new life to the high streets?