Fashion and apparel industry has been key to the growth of Indian retail over the last year across India. Along with this expansion of other food brands and coffee chains too have been instrumental in driving retail occupancy.
Following the pandemic slump in offline retail, expansion of international chains like Tim Hortons in India and apparel brands like Victoria’s Secret, and Uniqlo from July to December 2022 pushed retail space consumption, specifically in tier II cities leading to growth in retail spaces in these cities.
During the period, retail spaces grew rapidly in tier II cities. Uniqlo opened its first store in Chandigarh, Tim Hortons entered Ludhiana, and Starbucks, Biba, and Shoppers Stop opened in Dehradun. During the second half of 2022, the American home furnishings shop chain Pottery Barn forayed into Delhi-NCR, opening two stores in rapid succession. Adidas opened their largest experience store in Delhi-NCR, and Zara, Nike, and Azorte are among the other companies that have launched experience and flagship stores with a wide range of tech and other services in the city.
According to a report by real estate experts CBRE, fashion, and apparel retailers continued to expand their footprint from July to December 2022 amounting to a share of more than 42 per cent in overall leasing during the period.
Other prominent categories that continued to drive leasing activity during the same period included food and beverage at around 12 per cent and other hypermarket categories at around 7 per cent. The entertainment category, which was impacted the most during the pandemic, also emerged as one of the top demand drivers during the same period at a 6 per cent share in overall space consumption.
Space consumption predicts CBRE will be also driven by the entry of a slew of global coffee chains in India including Lavazza and Armani Caffe from Italy, Jamba from the United States, and The Coffee Club from Australia. Retail space consumption during the second half of 2022 shot up by 5 per cent to 2.43 million sq. ft as compared with the first half of the year when the total area consumed was 2.31 million sq. ft. Overall, in 2022, the retail sector grew by 20 per cent in a year to 4.7 million sq ft.
The retail segment is expected to grow continuously in the coming months. Anshuman Magazine, Chairman and CEO – India, South-East Asia, Middle East and Africa, CBRE said, “The Indian retail sector is recovering, and we anticipate that it will continue to gain momentum through 2023. Even amid difficult global economic conditions, international brands are expanding not only in tier-I cities but also penetrating tier-II & III cities as they see India as a potential market.”