Pan-European Footfall Analysis: how has the retail market fared in the face of the pandemic?

Patrick Delcol, Head of Pan European Retail at BNP Paribas Real Estate affirms that, “BNP Paribas Real Estate is delighted to present the second edition of its Pan-European Footfall Analysis. The findings suggest that some level of normality has been restored to European downtown prime pitches: brick-and-mortar premises still have traction, city centres are proving their appeal, along with some new retail models and formats that are being successfully introduced to inner cities.”

The report shows that the retail market is recovering, having been hit hard by the Covid-19 pandemic. Footfall began generally recovering from the spring of 2021 and a sense of normality has returned to downtown prime pitches. 

With a renewed emphasis on new retail models and innovations in the type of formats that are being offered to consumers, city centres are aiming to safeguard their unique appeal.

With government measures to protect the economy during the Covid-19 pandemic, jobs and private income have weathered the economic slowdown. As most shops were closed and uncertainty was high, saving rates reached an all-time high during the various lockdowns. However, the lack of opportunity for consumers to spend during the pandemic has resulted in a pent-up demand, which should drive the recovery of the retail market. Even if the economic growth will be supported by investment – and the EUR750 bn Next Generation EU fund – consumer spending should also be one of the main components of the rebound, underpinned by cheap financing conditions, a further improvement in the labour market and faster wage growth. 

In line with new consumer needs and the way people now interact with cities, mixed-use projects have become a notable trend across Europe. Developments include offices, residential units, restaurants, shops and hotels. These structures are often combined with green and recreational spaces in order to provide a fully rounded offering, which diversifies the city centre experience. 

Local authorities are keen to support these projects, as they will revitalise city centres and reimagine neglected areas of the city. The idea is also to capture a wider public than traditional retail, with shoppers, workers and residents all interacting with these asset types. 

Investors and developers are also seeing the appeal of mixed-use projects as they restore financial equilibriums and help meet citizens’ growing demand for greener spaces. 

Cities across Europe are now increasingly focused on how to get around in the easiest and most sustainable manner. In this way, many transportation projects are underway across Europe, such as the 35 kilometres of new bike lanes built between May and December 2020 in Milan.

With cities traditionally being known as noisy and with high levels of pollution, these projects are helping to alter the image of urban areas and bringing new clientele to certain areas, who are attracted by the ease of access. 

For cities such as Brussels and Vienna, there are even car-fee retail circuits, giving pedestrians greater freedom to fully enjoy their shopping experience.

Germany: the power of regional cities

Interestingly, the capital city of Berlin does not feature in Europe’s Top 10 cities for footfall. Instead, regional city centres such as Cologne, Munich and Frankfurt all compete for pedestrians’ attention.  

Indeed, Cologne’s mass-market circuit outperforms all other German cities and ranks  above London. Schildergasse is known as one of the three busiest German shopping streets and plays host to high-street brands such as H&M and Zara. The street is currently undergoing a transformation in order to keep up-to-date with current consumer demand, including the new mixed-use Antoniterquartier scheme, which was completed in summer 2020,

Munich and Frankfurt’s high streets take up third and fourth place in the European rankings, edging ahead of Madrid, Milan and Paris. Performance is similarly high within the luxury precinct, with Munich and Düsseldorf featuring in the European top five.

London: innovative projects help guarantee appeal

Despite the fact that a strong demand for online shopping has induced structural change within London’s retail market, the international appeal of the British capital has remained intact. Thanks to reinventing themselves with innovative experiences, physical stores have been able to retain their appeal. 

Bond Street has held its places as the global luxury street in London and continues to attract significant interest from wealthy foreign investors. Record-high rental premiums still make Bond Street the most expensive retail street in the UK. Chanel and Louis Vuitton, the former having bought their boutique store for £310m in 2020, are the main draw for customers.  

Oxford Street which has traditionally enjoyed substantial footfall from white-collar workers and tourists has been affected by the structural issues that retail has faced. With schemes to revitalise the area including the Oxford Street District Plan, which aims to invest more into public facilities, sustainability and pedestrianise the street, the idea is that the area will once again regain its appeal.

Paris: getting ready for the Olympics

With the next Olympic Games scheduled in Paris for 2024, the French capital is investing heavily in its urban environment. Architectural projects such as Atelier Gaité and Morland Mixité Capitale are examples of how the city is deviating from traditional Haussmann buildings and systematically incorporating retail to create vibrant neighbourhoods. 

Avenue Montaigne near the Champs-Élysées is the go-to place for luxury brands, with prestigious stores such as Armani, Dior, Chanel, Louis Vuitton and Saint Laurent all attracting an upscale clientele. 

The Champs-Élysées itself having faced a number of challenging years is on the road to recovery with its buildings and arcades undergoing redevelopment and a plan to add greater green and pedestrian space to one of Paris’ most famous shopping streets. With the flagship of Nike having setup in 2020 and offering an innovative shopping encounter and Rolex opening a new store, the street offers a mix of shopping experiences, combined with cinemas, restaurants and luxury car showrooms.

Madrid: continuing to attract visitors

Madrid is one of the exceptions in Europe in terms of continuing to attract visitors over the last two years, perhaps thanks to its gentle climate, history, culture and gastronomy. Thanks also to the city’s ongoing investment in infrastructure, which benefits both visitors and residents, Madrid continues to provide a reason to visit. Projects include the New Plaza de España and the renovation of the Canalejas Centre. 

The Gran Vía has established itself as key destination for shoppers thanks to big name flagship stores like Primark, Adidas and Huawei. Combining this with cinemas, theatre and restaurants means that this area offers a fully rounded retail experience. 

The Salamanca district, with its high level of business activity, and great residential purchasing power, makes it a preferred location for premium stores, hotels and restaurants.

Milan: on a quest to reinvent

Milan is another European city preparing for the Olympic Games, with the winter version due to take place in 2026. 

Combining this event with Milan’s status as the most influential global fashion capital, the Italian city has a vested interest in continuing to reinvent its urban environment. Indeed, the city is continuously striving to enhance mobility for locals and tourists with a new metro line, the development of additional pedestrian areas and cycle lanes across the city. Simultaneously, Milan is monitoring building structure and architecture, health and care facilities and office spaces to promote change and quality of life. This upgrade strengthens the appeal of the city for international retailers looking for premium locations for their European flagships. 

Meanwhile, Corso Vittorio Emanuele ranks as one of the most famous mass-market retail destinations in Milan. It benefits from a high level of footfall thank to one of Europe’s major department stores, La Rinascente, and a high number of renowned fashion retailers such as Zara, H&M and Foot Locker. The street has a very limited vacancy rate and strong demand for quality space.