MR 2018

53

Copenhagen Property Market Report 2018

Webshops may in fact foster the online equivalent of showrooms, i.e. webrooms, where customers examine product details online, before going to a physical shop to do their shopping.

trend since 2006. In this respect, Denmark is in the EU outrivalled only by Great Britain. In view of the EU ranking Denmark as the most digitalised country in Europe in its “Digital Economy and Society Index”, all precursors for sustained e-commerce growth are in place.

Some traditional shops close, e-commerce showrooms open Although Danes only do around 15% of their goods shopping online according to Dansk Erhverv, the boom in e-commerce is taking its toll on traditional retail shops. The items most frequently bought online are clothes and shoes, home electronics and beauty products, including cosmetics, making it difficult for traditional shops to retain sales momentum. This applies to private retailers as well as large and small retail chains with operations in the same product lines. As a result, we have seen multiple shop closures, especially in small local markets. At end-2017, even the international giant H&M announced that it intends to close a string of shops due to faltering sales. In addition, the thriving of e-commerce has caused online businesses to set up physical showrooms where customers may examine the goods before ordering them online from home. Physical shops and webshops co-exist Nevertheless, it could be argued that the effect of e-commerce on traditional retailing is not unequivocally negative. Although retail vacancy rates were edging up in Copenhagen and environs in 2017, we are in fact aware of some instances where physical shops and webshops co-exist much rather than outright compete. Webshops may in fact foster the online equivalent of showrooms, i.e. webrooms, where customers examine product details before going to a physical shop to do their shopping. In addition, an increasing number of businesses, in particular in the home electronics sector, have introduced click-and-collect services, where customers order online and pick up their purchases in a physical shop. The other way around, physical shops are supporting online sales as they give customers the possibility of returning goods purchased online. However, in physical shops it is also possible to order items that may be sold out from the shelves, for direct

Increased F&B competition takes it toll

Turnover in F&B sector is growing

45

3.5%

3.0%

40

2.5%

35

2.0%

1.5%

30

1.0%

25

0.5%

20

0.0%

12

13

14

15

16

09 10 11

12 13 14 15 16 E17

All trades

Restaurant trade

Note: Number of bankruptcies (%), Copenhagen. Sources: Statistics Denmark and HORESTA

Note: Denmark, DKK bn. Sources: Statistics Denmark and Sadolin & Albæk