European retailers will need up to 25 million sqm of additional logistics space over the next five years, according to a report by JLL. Demand is being driven both by the need to service existing stores and the growth of internet shopping, which is transforming the way goods are distributed to customers.
With online sales predicted to double in the first half of this decade, e-tailing is creating new demand for warehouse space, including mega sites of more than 100,000 sqm, specialist distribution centers and smaller, local delivery depots. Around 3 million sqm is going to be needed for dedicated e-fulfilment centers that deal solely with online demand. Another 22 million sqm will be needed for store replenishment, though retailers are increasingly moving to a fully integrated “omni-channel” customer offer, where customers buy in-store, online or via mobiles and either have their purchases delivered to their home or pick them up from stores or dedicated delivery centers.
“Many retailers have outgrown their existing supply chain infrastructure and are having to work out the best logistics model to service the growth of multi-channel retailing,” said Paul Betts, head of EMEA Logistics & Industrial at JLL. “Their strategy will depend on the type of products, the volume of internet sales handled and the speed at which these are growing.”
