Spending increasing but not yet back to the old level
Consumer spending has not significantly increased this year and is by no means back to the level of a few years ago. Most retail sectors saw a rise in turnover in 2010, including the sustainable goods’ market. 2011 will show whether this recovery is durable. Due to large-scale government cutbacks and economic uncertainty, purchasing power will remain under pressure.

Limited dynamics in the retail market
The pressure on turnover faced by retailers has resulted in shop rents declining and the supply of retail space increasing. This is also noticeable in the prime retail locations, although the damage here is often limited.
In general, there is pressure on rents, but this is primarily outside prime retail locations.

From new building to redevelopment
Despite the sluggish economy, in recent years a great deal of retail real estate has been completed. These additions usually derived from plans that were developed in economically good years. Up till 2012, even more retail
real estate will be added; thereafter, the new building market will fall silent. The emphasis will be more on functional redevelopment. New developments are only desirable if there is clear functional and quantitative justification.

The Internet and new media are unstoppable
On-line retail sales rose by 10% in 2010. Physical shops remain the most important sales channel, however, while the Internet is dominant for orientation. Mobile Internet is becoming an ever increasing factor in the orientation and purchasing behaviour of consumers. Social media are also
increasingly being used by both consumers and retailers as ways of communicating with each other.

Flexibility of retailers is essential
The extent to which retailers are able to keep pace with consumers will determine their success. At this time, it is essential to realise a strong on-line channel. Retailers will begin to focus more on the growing group of over-65s.
This target group attaches a great deal of value to service and quality, and their retail behaviour could be to the detriment of city centres.

The role of retail real estate is changing
Consumer spending in physical shops is structurally declining, which benefits on-line retail channels. In shopping streets and precincts, ‘branding’ and ‘experience’ will dominate. As the traditional retail function shifts, the role of the underlying real estate will do so too.
This represents a huge challenge for the real estate sector in the coming years.