Brick-and-mortar retail remains a primary component of European retailers' growth strategies. A study by global real estate service provider CBRE, the “European Retail Occupier Survey 2026”, confirms that 65 per cent of companies intend to expand their branch network in the near future. This could lead to up to 8,000 additional branches across Europe, after accounting for closures.
Retailers are also pursuing a strategy of continuity or expansion with regard to store sizes: 93 per cent plan to maintain or enlarge their branches at least at their existing size. For 91 per cent of respondents, brick-and-mortar retail continues to be a core part of their corporate strategy. In terms of direct customer engagement, 76 per cent of companies rate their physical stores as more effective compared to online channels. Regarding sales productivity, 56 per cent share this view.
Frank Emmerich, Head of Retail Leasing at CBRE in Germany, confirms that the study results align with German market conditions. He emphasises that prime high streets are showing robust letting dynamics. The ongoing expansion efforts of retailers are met with historically low vacancy rates, leading to considerable letting pressure on available prime spaces.
Location Selection and Digital Transformation
When acquiring new locations, retailers primarily prioritise the catchment area, its demographic structure, and footfall. Regional shopping centres are the preferred choice for expansion for 72 per cent of respondents. This is followed by retail parks at 53 per cent and inner-city high streets at 52 per cent of mentions.
In addition to physical expansion, companies are increasingly investing in digital technologies. Already 52 per cent of surveyed retailers have implemented Artificial Intelligence (AI) solutions, compared to 25 per cent in 2024. A further 43 per cent are actively evaluating the use of AI. Commonly used applications include personalised product recommendations, employed by 69 per cent of users, and chatbots in customer service, which are used by 63 per cent of companies.
Strategic Alignment and Customer Proximity
Tom Dancer, Head of Retail Occupier, Europe, at CBRE, highlights that demand for brick-and-mortar retail space remains stable despite economic uncertainties. Retailers are strategically selecting locations to reach specific customer groups and ensure long-term growth. Branches serve to strengthen market presence and represent an essential customer touchpoint.
Alex Ozga, Associate Director, European Retail and I&L Research Europe at CBRE, adds that the proportion of retailers using AI has more than doubled within two years. Companies are moving from the trial phase to active application to individualise customer engagement and optimise operational processes. Simultaneously, investments continue to be made in the fit-out and technology of branches to link digital possibilities with the physical shopping experience.
- —65 per cent of retailers plan branch expansion.
- —91 per cent view brick-and-mortar retail as a core strategy.
- —52 per cent of companies are already using AI.
- —Regional shopping centres are preferred expansion locations (72 per cent).
