But this erosion by no means signals the collapse of the sector. Several entry-level and mid-range brands are continuing to expand in promising suburban areas, focusing on proximity to their customers. In the high-end category, brands like Sézane and Balzac Paris are going for a hybrid strategy: they’re cleverly playing on the links between physical and digital, relying on a limited number of stores that let them show off their uniqueness, mainly in Paris and in regional cities. Large companies are also adapting. Inditex, for example, has reduced the number of its stores worldwide by 26% in five years, focusing instead on large, well-located flagship stores, such as Zara’s expansion on the Champs-Élysées and in Parly 2. Physical retail is not disappearing; it is transforming to become more experiential, more selective… and more profitable.
Other sectors are developing in a similarly targeted manner. In Paris, the proliferation of new restaurant, beauty, and sportswear concepts is helping to transform the retail landscape. The latter is also being revitalized by the arrival of new foreign brands, which continue to flock to the capital’s central districts. Although footfall decreased significantly during the Olympic Games, it has recovered significantly since then. Admittedly, the impact of the trade war on international tourism and certain market categories, such as luxury goods, remains difficult to predict. Nevertheless, the outlook remains positive overall and demand from retailers remains strong while real estate opportunities are limited. Averaging 4.4% in Paris, vacancy rates are stabilizing at low levels or trending downward on most main streets, putting pressure on rents in certain locations.
Demand is also strong outside the capital. Newmark has identified nearly 130 expansion plans that could potentially result in the opening of more than 2,000 stores in France by 2025. Suburban retail areas account for a large share of these projects, in traditional sectors such as fast food, food, pet stores, sports, and discount stores. The outskirts are also undergoing renewal thanks to the development of dedicated leisure centers offering a wide range of activities (go-karting, bowling, climbing walls, escape games, trampolines, etc.) and a varying range of restaurants. More than a dozen will open in France in 2025, representing a total area of almost 120,000 sq m. Some of these complexes are the result of the redevelopment of existing shopping malls and retail parks, enabling landlords to diversify their retail offer, broaden their customer base and boost visitor numbers to their sites. On the consumer side, the leisure boom is part of a trend towards prioritizing experiences over the purchase of material goods.
On the investment side, the market remains highly selective and limited. As a result, two exceptional transactions (including the joint venture formed by Kering and Ardian involving three Parisian buildings) accounted for most of the volume in the first quarter of 2025. However, fundamentals are solid, with limited quality supply, strong appetite for retail parks and trophy assets, and the return of retail to favor among international investors.
In short, the French market remains subject to adverse conditions, indicative of a profound shake-up, with opportunities for those who can adapt their offer or assets to new consumer habits and anticipate future trends.
