Stores have growth in their sights: GfK forecasts that physical stores in Europe will generate an additional 2.1 % of turnover in 2018, after a 1.8 % turnover increase in 2017.
Every EU country enjoys growth
It is looking well for physical stores in Europe according to a new GfK study about European retail. All across the 28 EU member states, a 2.1 % turnover increase is expected, although it varies a lot from country to country: France, Spain and Hungary will have an actual turnover growth, but other countries will have increased inflation that will nullify turnover increases.
In the past year, every European country experienced economic growth and the average consumer’s spending power grew 1.9 %. Only those in Great Britain did not have that growth. On average, physical retail turnover grew 1.8 % and it was even 3.4 % in the Netherlands. Belgian growth was lower, at 0.9 %.
Store areas are growing, expect in the Netherlands
There was also more European store space in 2017, even though that also differed from country to country. The Netherlands were the only country to have less store space (- 0.4 %) and store space per capita remained stable or dropped in about half of European countries. GfK did point out that Benelux shoppers still have twice as much store space to visit compared to Romania.
The Dutch store space drop did positively impact the Netherlands: its productivity per sqm was exceptionally high in 2018 and grew 3.8 % to 3,806 euro per sqm. In Belgium, that same number dropped 1.1 %.
Prices continue to grow in Europe
The Brexit, political and economic challenges and possible import measures from the United States are still in the air, but 2018 will still generate growth according to GfK. Online sales continued to steal away market share in 2017, but the physical retail industry managed to offset those losses with increased demand.
Price increases (because of an inflation forecast) may prove a stumbling block: European inflation stood at 1.7 % in 2017 and that will most likely not change in 2018: GfK forecasts a 1.9 % consumer price increase in the European Union.
The report did not believe Belgian inflation would be as high as in 2017, but did estimate Dutch inflation would be slightly higher. Inflation will impact Eastern Europe hard, considering consumers will have to pay a lot more for products after years of deflation.
