European retailers continue to prioritise physical expansion despite a more challenging economic backdrop and growing investment in AI and digital capabilities. Nearly two thirds (65%) still plan to expand their store portfolios in the near term, creating the potential for up to 8,000 net additional stores across Europe, according to CBRE’s European Retail Occupier Survey 2026.
More than nine in ten (93%) retailers intend to maintain or increase the size of their stores, while 91% say physical retail will remain a core part of their business strategy. Retailers continue to view stores as a critical driver of performance, with 76% rating brick-and-mortar retail as more effective than online channels for consumer engagement and 56% as more effective for sales productivity.
The survey also shows sustained demand for high-quality retail destinations. Catchment and demographics, together with footfall, are reported as the most important factors when selecting new locations. Regional shopping centres are now retailers’ preferred location for expansion, cited by 72% of respondents, ahead of retail parks (53%) and city centre high streets (52%).
Alongside investment in physical stores, retailers are accelerating the adoption of AI. More than half of respondents (52%) report to have already implemented AI solutions, up from 25% in 2024, while a further 43% are actively exploring the technology. Product personalisation and recommendation tools (69%) and customer service chatbots (63%) are the most common use cases for AI.
Tom Dancer, head of retail occupier, Europe, CBRE, said: “Despite ongoing economic uncertainty, demand for physical retail space remains resilient. Retailers continue to take a strategic approach to expansion, focusing on locations that provide access to the right customers and support long-term business growth. Physical stores are a key part of that strategy, helping retailers strengthen their market presence, and they remain at the centre of how they connect with customers.”
Alex Ozga, associate director, European retail and I&L research, Europe, CBRE, said: “The pace of AI adoption among retailers has increased significantly over the past two years, with implementation rates more than doubling since 2024. What we’re seeing is a shift from experimentation to deployment, as retailers use AI to personalise customer journeys and improve operational efficiency. This growing investment in AI is not diminishing the role of the store. Instead, retailers are combining advanced digital capabilities with increased investment into the fit-out and technology of their physical locations to create more seamless, data-driven customer experiences.”
*CBRE’s 2026 European Retail Occupier Survey includes responses from more than 70 pan-European and Global retail occupiers with a combined worldwide portfolio of c. 150,000 stores.
