Grand Paris Express to create potential ‘gold mine’ for retailers

10 November 2017

Heralded as ‘the most ambitious new subway project in the Western world,’ the Grand Paris Express, currently under construction in the  Ile de France region, is expected to create a gold mine for retailers, according to international real estate advisor Savills.

The project, which is part of a strategy to better connect Paris’ suburbs with it’s centre, will expand the century-old Metro system to include four new lines, 68 stations and more than 120 miles of track. According to Demographia, this project will grow the French capital into the seventh largest metropolitan area in the world and the largest in Europe

 Following its completion, which has been proposed for 2030, Savills predicts that the Metro’s users will increase by 40% and two million passengers will travel on this new network every day.  Following the construction of 68 new stations, the hike in footfall generated by the Grand Paris Express project with consequentially also create 68 new ‘retail hubs’.

“In the same way that new technology and e-commerce has reshaped the way we now shop, travelling, and particularly commuting, is now being recorded as one of the peak times for purchasing activity,” comments Lydia Brissy, Director of European Research, Savills. “In a fast-moving world, urban consumers are increasingly time-poor and the ability to shop ‘en route’ is an enormous convenience.”

The travel retail market in France is estimated to be worth €5bn, of which two thirds is generated by airports and the remaining by train stations.  For retailers, it is more a matter of enjoying a great flow of daily passing customers who may wish to avoid having to travel elsewhere to make their purchases and both these transit zones have the great advantage of being open from early in the morning until late in the night, and up to 365 days per year.

“The evolution of retailing in train stations is more recent but retailers are generally looking for strong footfall,” comments Christian Nehmé, director of Retail, Savills France. “So it comes as no surprise that train stations are increasingly a target. Whilst the retail supply is currently limited, the Grand Paris Express will open up new opportunities as new hubs with strong footfall will be created.”

Savills has recorded that Paris Gare du Nord, with a footfall of 700,000 per day, Saint-Lazare (with 359,200) and Paris Nord (with 247,000) all far exceed the footfall of the Quatre-Temps shopping centre in La Defense, one of the largest in Europe, which has a footfall of 125,000 per day.

“Interestingly, because of this high footfall, some retailers are showing an increasing interest in airports and train stations as a gateway to enter the country, as opposed to a high street flagship,” comments Nehme. “The main challenge for retailers however is to turn commuting people into consumers.”

Savills has cited examples such as Dutch brand Hema, which opened its first UK store in London’s Victoria station, and French brand Devialet, who made their UK debut on the concourse near the Eurostar terminal at King’s Cross station. 

According to the latest data available from Retail & Connexions (a subsidiary of SNCF), the capture rate is 33%, which is relatively good for a gateway not specifically designated to retail. Yet the conversion rate ranges between 60% and 75% depending on stations, against 77% in shopping centres.

Nevertheless, the Grand Paris Express will create a plethora of opportunities for retailers looking to take advantage of increasing numbers of commuters and tourists alike. Lydia Brissy suggests: “Convenience store retailers should look at station locations in residential areas anticipated to grow fast, such as Saint Denis Pleyel,  La Defense, Massy and Versailles.  And retailers looking for a flagship should focus on stations with strong footfall, notably from tourists coming from Roissy CDG or Orly airport. Stations enjoying strong daily commuters will be ideal locations to open pop-up stores or concept stores.”

 
 

General Enquiries

Savills Margaret Street

 

Key Contacts

Lydia Brissy

Lydia Brissy

Director
European Research

Savills Margaret Street

+ 33 (0) 1 44 51 73 88

 

Christian Nehme

Christian Nehme

Co-Head of Retail Department
Retail

Savills Paris

+33 1 44 51 73 26