Colliers Denmark Market Report 2024

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RETAIL - COLLIERS MARKET REPORT 2024

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In particular, there was a consumption shift towards food and other everyday goods, and it is not uncommon for other consumer goods to be deprioritised when dispos able income decreases. There is often a time lag on the effects of interest rate increases, and we estimate that the impact on consump tion patterns will become clearer during 2024. This should also be seen in light of the fact that many households will have a higher interest rate on their mortgages and imme diately lower disposable income as of January 2024 as a result of interest rate adjustments. The full extent of the interest rate increases is unknown at this point. At the end of 2023, consumers were still pessimistic, but not to the same extent as in late 2022 and early 2023. The prospect of decent wage growth, slowing inflation and continued high employment has softened the nega tive outlook, but consumers are still cautious.

turn of the year 2022/2023 in line with record-high infla tion. In addition, eateries, takeaways and shops had to contend with sharp hikes in energy prices in the win ter of 2022/2023. As a result, the market has fared bet ter than feared, but in 2024, we see a risk that retailers could face another challenging year if the economy is hit by a downturn. On the positive side, however, energy prices are back at a significantly lower level compared to 2022, and retail ers’ extensive conservation exercises in the winter of 2022/2023 are no longer necessary. Among the meas ures were shorter opening hours (to save light and heat) and the use of fewer freezer counters. In addition, the Salling Group has closed its new Basalt chain of “super low-price stores” that, for example, did not have refrigerated and frozen goods. The closure of Basalt is probably also related to the fact that Danish con sumers are very much bargain hunters – another part of the Basalt concept was to have fixed, low prices, i.e. with out regular special offers.

Retail sales have helped to support the rental market, although many retailers had their rents adjusted at the

Danish consumers became less pessimistic in 2023

30

20

10

0

-10

-20

-30

-40

14

15

16

17

18

19

20

21

22

23

Consumer confidence indicator

Source: Statistics Denmark, Colliers