Where is the retail journey headed next?
From: Larry Brennan, Head of European Retail Agency at Savills
The European retail sector has been a story of remarkable recovery over the last few years. Occupational demand across prime retail destinations and assets remain buoyant driving down vacancy, new international entrants continue to be acquisitive and looking to new gateway markets for opportunities, and European retail investment volumes for Q1-Q3 2025 have surpassed €24.6 billion, a 16% increase on the same period of 2024 and 3% above the five-year average for Q1–Q3. So, what will be the key trends over the next five years?
- As synergies in omnichannel strategies evolve, the role of the store will continue to elevate
- Retail polarisation, between prime and secondary, will intensify over the next five years
- Development pipeline to remain constrained
- Smaller gateway cities in Europe will move up the agenda for new international brands
- New international entrants to Europe will come from a broadening range of origin markets
- Value retailers’ widening consumer appeal will continue to support expansion
- Evolving demographic shifts will help shape the occupier profile of Europe’s retail destinations
- Retail investment momentum to continue but to remain selective
- Retail yields set for gradual compression while staying competitive
Larry Brennan, Head of European Retail Agency at Savills
So, as always with retail, there is plenty of opportunity and the sector continues to change as new investors and market entrants emerge and customers’ spending patterns shift.
