What: CBRE forecasts that foot traffic in retail locations will exceed pre-pandemic levelsin 2025.

Why it is important: This does not mean that stores just have to wait for traffic to come back: the need to adapt and radically transform themselves.

Retail foot traffic in major shopping areas is projected to exceed pre-pandemic levels by 2025, with CBRE forecasting a return to these levels by the third quarter of 2024. As of last year, foot traffic had already recovered to 81% of 2019 figures in 10 key retail locations. However, the retail landscape faces challenges due to increased rents, which have risen by 9% in the Americas and 5.8% globally since 2021. This has led to record-low space availability and high rental costs, prompting retailers to explore innovative growth strategies and alternative locations with lower rents and fewer operational constraints.

Retailers are adapting by expanding into smaller, alternative locations to facilitate brand growth and enhance convenience for digital transactions. The importance of physical stores in driving digital sales remains significant; the International Council of Shopping Centers (ICSC) noted that opening a physical store can boost a brand's online sales by nearly 7%, whereas closing one might decrease them by 11.5%. Moreover, the interplay between online and offline sales channels continues to be crucial, with physical stores accounting for 78% of retail growth in 2022, a significant increase from 46% in 2019.

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