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Hong Kong

Health-Conscious Consumers Help Retail Market Overcome Hurdles

Healthy living trend is driving retail expansion


Take a look around any one of Hong Kong's bustling retail centres and it's clear that it's fashionable to be fit. A growing awareness of healthy living among the city's shoppers is driving demand for new retail space for sports-focused stores, gyms, and wholesome food & beverage (F&B) concepts.

Sports brand retailers have leased 100,000 sq ft of new space in the last twelve months alone, according to JLL's latest Retail Atelier report. Footwear brand Skechers has opened a flagship store in Causeway Bay, while Adidas has set up impressive flagships in Tsimshatsui, Causeway Bay and Central.

While overall retail sales contracted 10.8% y-o-y through the first five months of 2016, sports brands and gyms have bucked the downward trend, spurred on by this year's Olympic Games in Brazil.  The fitness centre market has shifted towards personal training centres, rather than large gyms, evidenced by the smaller fitness companies that have been vying to occupy the market position vacated by the closure of California Fitness in July 2016. Meanwhile, Pure has gyms and yoga studios as well as organic eateries. This evolution has clearly paid off as the group has doubled its footprint in Hong Kong within three years.

F&B concepts offering healthy food options, juice bars and vegetarian restaurants have mushroomed to accommodate consumers' willingness to improve their diet. Riding high on the healthy-eating trend, Grassroots Pantry, 3/3rds, SUPAFOOD and Pololi have all expanded their presence in the city.

The changing retail landscape presents opportunities for sportswear, lifestyle and F&B retailers to negotiate competitive rents in areas that were beyond their reach before the Hong Kong's current economic malaise. This new reality is perhaps best exemplified by Adidas' new three-storey flagship on Queen's Road Central – previously home to luxury goods brand Coach.

Given that the market for sportswear and sporting goods is potentially immense – with 60% of Hong Kong's population not currently meeting the WHO's standards of "adequate physical activity" – this is a trend that could run and run.

Find out more about JLL's retail services here.

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