Study Finds U.S. Retailers Lead the Way in International Expansion


The retail industry’s international expansion slowed a bit in 2016 from its strong pace of a year earlier as retailers adjusted to e-commerce and shifting exchange rates, according to CBRE Group Inc.’s 10th annual study of international retail expansion.

The study found that retailers’ activity in entering new markets increased by 2 percent last year, a decline from their 3.1 percent pace in CBRE’s 2015 study. The slight deceleration likely resulted in fewer retailers debuting in emerging cities; Only one up-and-coming market – the Croatian city of Split – ranked among the top destinations for expanding retailers last year.

“As e-commerce grows, retailers have become more deliberate and meticulous about how many stores they open and where they do so,” said Anthony Buono, chairman of CBRE’s Global Retail Executive Committee. “Their global expansion favors the tried-and-true global gateway markets where they get the most exposure for their brands and access to huge populations with disposable income.”

To gauge retailers’ expansion, CBRE surveyed 166 cities across 51 countries regarding how many international retailers had debuted in their markets in 2016.

CBRE found that Europe has expanded its dominance as the preferred new destination for expanding retailers. That likely can be traced to European retailers now preferring to expand to other countries within their home continent rather than in markets where currencies have become expensive, such as the U.S.


According to CBRE, 43 percent of retailers’ global expansion into new cities in 2016 occurred in Europe, up from 36 percent a year earlier. In comparison, Asia claimed 28 percent of international retail expansion last year. The Middle East and Africa claimed 12 percent, and North America 11 percent.

Meanwhile, U.S. retailers remain the most active with regard to international expansion by a wide margin, aided perhaps by the dollar’s strength relative to other currencies.

Of all expansion at city level, 21% was by U.S. retailers. The next most aggressive expanders were Italian retailers at 12 percent new-market penetration and French retailers at 11 percent.

“U.S. retailers’ expansion abroad is aided significantly by their strong brands and execution, especially for food and beverage operators,” said Brandon Famous, CBRE senior managing director and retail leader, the Americas. “The U.S. retail market is relatively mature and somewhat crowded, so several American retailers instead are targeting Europe, Asia, and the Middle East for much of their expansion into new markets.”

Globally, CBRE found coffee shops and restaurants to be the hottest retail category for expansion into new markets, with retailers in that category accounting for 22 percent of all expansion at city level. Next in line were specialist clothing stores (18 percent) and mid-range fashion stores (17 percent).

On the city level, Hong Kong remains the most popular destination for expanding retailers. Hong Kong’s retail rents are receding from their recent highs, allowing new entrants more affordable access to its retail real estate.

Toronto is the only North American city to crack the top 10, aided by its proximity to the United States and the underlying strength of its economy. Of the retailers who made their first foray into Toronto last year, 43 percent were from the U.S.

New York City ranked 26th with 17 new entrants.

To download the report, click here.