Czech Republic attracts retail chains and brands; confidence slowly returns to retailers

This year has seen the addition of only 117,000 m² of space in the domestic retail market according to DTZ. This year’s largest new project, the Galerie Harfa shopping center, will open in the second half of 2010, as will the second phase of Forum Liberec.

More important for the local retail market is the fact that, in spite of continuing uncertainty, the Czech Republic is still a popular destination for foreign brands – both networks and franchise concepts.

Despite the economic situation, other retailers which are already well established among Czech customers are continuing to expand. “It’s true that there are shopping centers on the market with excess demand from tenants, as well as those that must deal with tenants leaving,” says Lenka Dvoøáková, Senior Retail Agent at the Prague office of the international consulting firm DTZ.

DTZ expects retail chains such as Desigual, Ulla Popken and Carpisa to open sales outlets in shopping centers. Franchise and master-franchise partners of several franchise concepts, such as the Italian fashion brand Persona, the Brand New Products outlet, cosmetics retailer Nicole and The Cheesecake Shop, among others, are being sought in the Czech Republic. “More retail concepts from abroad are turning to us. Everything indicates that retailers are regaining their confidence in the Czech market, though they are very cautious in selecting locations to lease,” says Lenka Dvoøáková.

In light of the significant decrease in construction of new shopping centres, a range of brands are again occupying individual brick-and-mortar shops, which is apparent with several businesses opened this year, such as the Pylones gift shop and Hooters of America restaurant. However, this does not involve only retailers – in the first half of this year, brands for which brick-and-mortar shops are part of their business concept, such as Van Graaf, Högl, Mandarina Duck, Oilily, I Am and Little Foot, opened in the centre of Prague.

Of course, it is not only new brands that can be positively evaluated by developers of shopping centers and retail parks as well as owners of commercial spaces in attractive parts of cities. A full range of businesses are continuing to expand this year, albeit cautiously. These include the biggest hypermarkets, restaurants, cosmetics retailers, drugstores and fashion brands, such as Lindex, New Yorker, Takko Fashion, Gant, KIK, Deichmann, CCC, Cocodrillo, Naturhouse, dm, Rossmann, KIKA, IKEA, Sconto, Siko Koupelny, Komfort, Palace Cinemas, Baumax, Bauhaus, Expert Electro, Tesco, Kaufland, Žabka and, from the dining segment, Coffeeshop, Subway, McDonald’s, The Pub, Ambiente, Amrest will all of its brands – KFC, Starbucks and Burger King – and many others. With the limited supply of new shopping centers, expansion is mostly oriented toward stable shopping centers with good results in attractive locations or shopping streets.

Source: DTZ