Over 100 senior retail industry representatives from NEPI Rockcastle’s tenants in its shopping centers across CEE attended the one-day event themed ‘Let’s Bloom!’, inspired by Romania’s national flower, the peony –symbolic of health, wealth, and fulfilment.
Marek Noetzel, NEPI Rockcastle’s Chief Operating Officer, kicked off the day by noting the turbulent times the retail industry had navigated its way through in the past four years, from the outbreak of the covid virus in 2020, to Russia’s war on Ukraine.
“We are living in a world that has fundamentally changed in the last four years and we must adapt to this new reality…But one thing hasn’t changed and that’s a good thing. Our customers like coming to good quality shopping centers. We love to meet-up. We are human beings, social animals,” he said.
Marius Barbu, NEPI Rockcastle’s Group Asset Director, added that: “People need to congregate, communicate, and share experiences in the physical exchange of goods, which is how human society evolved.”
“NEPI Rockcastle has successfully created that magnetic mix of leading brands and social experience, which draws consumers to its shopping centers in droves. Demonstrated by the double-digit growth in sales and footfall across the portfolio last year and the record financial results reported for the first quarter of 2024”, he said.
Western Europe Struggles with Economic Stagnation but the Music Plays on in CEE
The global economy has generally outperformed last year’s pessimistic expectations in the first half of 2024, with inflation coming down significantly, while the U.S. economy and labor market have proved particularly resilient — buoyed by government stimulus spending — and with Chinese economic growth slightly positively surprising on the upside, Carsten Brzeski, Global Head of Macro for ING Research, told the audience.
But he said the world was facing something completely new, not a recession scenario, or a cycle turning, but a prolonged period of stagnation, particularly in Europe and notably in Germany, as considerable structural changes take place, foremost the retreat of globalization.
The pessimistic outlook for the Western European economies stands in marked contrast to their CEE counterparts where GDP growth remains solid, Valentin Tătaru, ING Chief Economist for Romania, said in his following presentation.
“We in CEE, get a little irritated by the gloominess of the Westerners. We have had roughly 30 years of uninterrupted economic growth, with a few hiccups along the way. So, we don’t want to continually hear about these structural problems. We like to grow. Luckily, it’s still the case that the music plays on for us and I think it can continue for the foreseeable future,” he said.
Regenerating Humankind: Principles of Progress in Fragmented Times – Christine Boland
Zeitgeist keynote speaker, Christine Boland, electrified the Retailers Day audience with a whirlwind presentation on possible solutions for a global system which is: “extractive, destructive, very egocentric — and coming to an end.”
“There’s another system emerging, which is more about mutuality, more about regeneration and more about being ‘eco-centric.’ Where these two systems meet there’s crisis, there’s conflict, there’s confusion and complexity and that’s exactly where we are now,” she said.
The challenge for retailers is in connecting with the Generation Z age cohort of young consumers who have experienced their formative years in crisis; are the first generation of digital natives; and are the first who are likely to face a less affluent future than their parents, Christine noted.
“The message to any brand is, be yourself. Everybody else is taken. This generation will find you. They are fluid, but don’t be fluid yourself. Be strong, consistent, and reliable.”
These principles can be applied within a shopping mall by making people feel at ease and welcome, with staff that are genuinely curious about their customers and their needs, she concluded.
Retail Brands Lay Out their Business Strategy Stalls
Four leading retail brands and NEPI Rockcastle partners in its shopping centres were next to ascend the stage and lay out their business strategies and visions on CEE markets.
Ivaylo Pavlov, Managing Director Romania, Bulgaria and Serbia for the CCC Group, said: “We have our e-commerce and online platforms, and the main goal is to combine these through cross-selling to give customers a seamless shopping experience, that starts from the physical store and moves online in a circle. We want the customer to have a great experience and become much more engaged with us as a group and a brand and I think this natural reflects on the quality of the landlords we have.”
Agata Witkowska, Senior Real Estate Manager CEE for Rituals, talked about how the luxurious, but affordable, home and body cosmetics group, is the newest major brand entrant into the NEPI Rockcastle network and expanding in Poland and Romania.
Rituals was founded as a “hopeful start-up” in the Netherlands in 2000 and now has 1,200 stores globally, alongside other channels such as wholesale, with the real boost to expansion coming in the last four years. The brand is opening, on average, one new store around the world every working day.
The local representative on the Retailers Day panel session was Nicoleta Iordan, co-founder of Cărturești The Romanian Book Village, which opened its first tiny bookshop of 40 sq m in downtown Bucharest 24 years ago and now has 55 stores across the country.
“We learnt that our customers’ journey is ‘ritual-based,’ it’s not transaction-based. So, when they come to our stores, they usually spend 40 to 60 minutes, and they browse the books, finding a place where they can sit comfortably. Kids and teenagers even love to be seated on the floor, and we create spaces like living rooms with wooden or carpeted floors, allowing people to be comfortable,” Nicoleta said.
The final brand to present to the retailers’ forum, was the Lithuanian-based Adventica Group of family entertainment centers, represented by co-founder CEO Vytenis Benetis, who has an unusual background for the sector as a military analyst and academic in engineering sciences. He said the Adventica concept was designed and created by three fathers who agreed they were frustrated by the experience of traditional children’s play centers.
“We agreed on three ‘pain points,’ when we took our children to ‘entertainment solutions’ wherever they were. So, we designed and built our own family entertainment centre and the first one was housed in a NEPI Rockcastle shopping centre in Lithuania. They really believed in us as a start-up. Fast-forward to today and we’re now building in our fifth country with hopefully many more to come,” he concluded.
Participants attending the Retailers Day were able to take a tour of NEPI Rockcastle’s Promenada Mall Extension development site in Bucharest, a circa 282 million euro, 55,400 sq m mixed-use project, which is due to be completed by 2026. The development involves excavating the deepest building basement in CEE, at 26 meters, to accommodate 2,400 car parking spaces over six levels. This presents a significant engineering challenge due to the construction site’s complex geological profile.
