61 procent of Dutch retailers expect higher revenues in 2017

Dutch retailers have a generally positive outlook with regards to the development of their revenues over the coming year. In 2016, approximately 54% of the questioned retailers saw their revenues increase and for 2017, approximately 61% expect increased revenues. When asked about the margins, approximately 48% expect these to stay the same. 32% indicate that their margins will increase in 2017. After the downward trend of the past few years, with many bankruptcies and increased vacancy levels, a positive development has once more set in. In 2017, international investors intend to purchase over EUR 1 billion worth of stores, in particular in Dutch shopping streets.

This is evident from studies conducted by Capital Value during the past few months. Approximately 100 retailers with a total of almost 2300 branches across the Netherlands, as well as 30 large international investors, participated in the study. The results of the study were presented during a gathering of international investors in Amsterdam.

35% of retailers expect their number of branches to increase, while 17% expect a decrease
35% of the retailers expect to open additional stores within their chain this year. 17% of retailers stated that they intend to close branches. The falling by the wayside of competitors, the increased number of vacant stores with lower rents, the growth of the economy and demographical developments all offer opportunities for retail businesses to open additional branches. In many Dutch shopping streets, new initiatives are starting to appear, after a substantial period of showing a downward trend. However, it is noticeable that older, often independent retailers, with no successors and/or insufficient knowledge of modern sales channels and marketing are less positive about their future. On the other hand, young entrepreneurs are increasingly bringing innovative formulas to the market.

63% of the retailers questioned have an online store, mostly accounting for a low percentage of revenues
A large portion of Dutch retailers anticipate a future in which physical stores are combined with online shopping. 63% of the retailers questioned have an online store, and 10% of the retailers without an online store indicate that they would like to have an online store in the future. 5% of retailers are currently constructing an online store. The majority of the retailers questioned (around 58%) derive limited revenues from online sales (between 0 and 5% of total revenues). Approximately 16% obtain online revenues of more than 15% of total revenues.

Increased expenses are considered the biggest threat
35% of retail businesses indicate that they consider rising expenses such as staff costs and premises to be the biggest threat to their business. Competition from existing stores (14.5%), online stores (22.5%) and macro-economic factors are seen as lesser threats.

International investors intend to purchase over EUR 1.1 billion worth of stores in the Netherlands in 2017
In the past 10 years, the role of international investors in the retail market has increased substantially. In 2016, international investors invested approximately EUR 900 million in Dutch stores. The results of the study show that the investors questioned expect to invest a total of over EUR 1.1 billion in Dutch storefronts in 2017. Some of these investors have never invested in Dutch stores before. The total amount for 2017 may end up being higher, as not all international funds with Dutch stores in their portfolio participated in the study. The fact that the Dutch retail market is picking up, is increasingly drawing the attention of international investors, who identify the Netherlands, France, Spain and Germany as their favourite countries to invest in.

Investors and retailers are most positive about high streets
Approximately 43% of the retailers state that they consider the main shopping street, also commonly referred to as the “high street,” to be their preferred location when opening a new store. High streets are also very popular among international investors. Approximately 81% of international investors state that they are particularly interested in investing in high street shops across Dutch cities and towns. Approximately 55% state that they would like to invest in supermarkets.

According to Marijn Snijders, Managing Director of Capital Value, “It is good to see that both retailers and international investors are taking a more positive view of the developments in the retail market. After a downward trend during the past few years, as well as many bankruptcies and an increased vacancy level, more and more entrepreneurs are seeing opportunities. There are once again new initiatives in many shopping streets. Particularly demographic growth, migration into cities, economic growth and the available capital can contribute to providing a new boost to the development of inner cities in the Netherlands.”

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