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The expat view on why the Dutch retail market is thriving

Wednesday 30 January 2019 Data Insight & AnalyticsRetail Consultancy

Frances Goodfellow's picture
By Frances Goodfellow

Having now lived in the Netherlands for 6 months I’ve made several observations about this great country, some reaffirming stereotypes others surprising me for the better, and some for the worse.

No, sadly they don’t wear clogs, but yes, it’s true, they are very tall. And yes, it’s also true that bikes are king, and as a result, as a nation, the Dutch seem much healthier than us Brits. That’s until you look closer at their favourite foods. Chocolate sprinkles on bread for breakfast, and that’s not just for the kids, my grown up Dutch friends still eat them, even at work. A croquette or smoked herring in a plain roll is a common sight at a Saturday market for lunch or snack on the go. I haven’t quite got my head around these yet though. It’s also fair to say they are a fashionable nation. So, when I read about the doom and gloom of UK retail market, it’s made me reflect on what is working over here across the water, but also where the scope lies to go further.

 


A delicious snack!?

 

This affluent nation is experiencing continued economic growth, rising employment and wages. Retailers are on the whole thriving, as is consumer spending, with increased interest in investment within the Dutch retail market from within Europe (Cushman and Wakefield, 2019). What could be better?

Having visited a number of cities and retail centres throughout the country, I have been struck by a number of differences to the UK.

Firstly, covered malls are few, with traditional high streets and smaller local centres still dominating the retail landscape. As a result, vacant units are much less common a feature. Although towns and cities are less densely populated than those in the UK, and therefore a lesser demand for as many large retail destinations, given the climate is so similar, I would have expected more covered malls to have popped up. So why is this the case? From what I can tell, tight regulations make it more challenging to build new schemes or evolve existing centres. For example, with lengthy leases of 50 years being the norm, and often only partial ownership of a scheme, this proves to be a challenge for landlords. This is however beginning to change with the likes of Utrecht’s Hoog Catharijine covered mall which reopened in 2015 recognised as being one of the country’s strongest centres, driving an annual footfall of over 26 million, paired with some landlords trying to shift towards shorter 20 years leases¹.

With the likes of ARKET² and Uniqlo³ opening their first stores in the Netherlands, both in Amsterdam, in 2018, this is just one way of demonstrating the thriving market here. But the Netherlands seem to be late to the party to attract a number of leading European wide brands than other countries have been.

With Oxford Street or regional malls in the UK the obvious first stop for new brands entering the country, is the lack of these types of centres in the Netherlands holding them back from securing these new brands sooner?

Given large towns and cities are located relatively close together, and the retail offer tends to be reasonably similar from one to the next, a centre’s catchment tends to be smaller than that of UK centres. Linked to the size of the country, the Dutch are less inclined to travel long distances, and given the lack of big retail destinations, there is also less of a desire to do so currently. But will we see this change over the next 10 years if more relaxed regulations make it easier to build bigger, more exciting centres?

Experiential retail is increasingly at the forefront of retailer’s minds to showcase their brand and make sure shoppers are still thinking about them after leaving the store, trying to connect with the consumer on numerous levels. With, on the whole smaller units here compared to the UK, there is less opportunity to explore this avenue, especially in a high street type environment. On my recent trip to Hoog Catharijine however a pop up store celebrating 20 years since the release of the first Harry Potter book was a perfect example of a centre embracing this type of experience.

So is this more traditional retail environment allowing Dutch high streets to thrive, or potentially in some cases holding them back from a greater and more diverse offer, it’s hard to say. I certainly enjoy the thriving high streets, unique shop fronts and their lack of vacant units in the likes of The Hague and Leiden, but when its hammering it down with rain these locations are less desirable when wanting to shop.

 

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Having now lived in the Netherlands for 6 months Frances Goodfellow has made several observations about this great country, some reaffirming stereotypes others surprising for the better, and some for the worse.

The expat view on why the Dutch retail market is thriving