According to the Savills Research European Retail Market, Prague and the wider Central and Eastern European region are set as key drivers of Europe’s retail recovery in 2025. The Czech Republic ranks among Europe’s best-performing economies. This year, real retail sales are expected to grow by 4.1% placing it ahead of many Western European markets such as Germany (2.7%), France (2.3%) and the United Kingdom (0.8%). Italy is even forecast to see a slight decline of -0.1%. Pařížská Street in Prague remains the region’s strongest luxury high street and continues to attract major global brands. Recent and upcoming openings include CHANEL, Ermanno Scervino, Damiani, Max Mara, and Pasquale Bruni.
Veronika Králová, Research Analyst at Savills, says: “The Czech capital continues to reinforce its reputation as one of Europe’s most attractive entry points for international brands. In 2024, Prague matched London in welcoming the highest number of new international brands, 38 in total, the strongest performance among all CEE cities.” Prague’s competitive advantage is underpinned by a combination of robust domestic demand, strong tourism inflows, and accelerating consumer spending. The city leads 96 major European urban markets in forecast annual per-capita consumer spending growth through 2030, including projected increases of 5.1% in clothing and footwear, 6.7% in furniture, and 7.9% in telephone equipment.
CEE region in the spotlight as a key target for international expansion
Consumer spending across CEE markets has expanded significantly over the past 15 years, increasing the region’s attractiveness to value-oriented, aspirational, and luxury brands. Key gateway cities, Prague, Warsaw, and Vienna, are expected to remain among Europe’s best-performing retail destinations in the coming years.
The region offers several advantages for retailers, including notably lower occupational costs. Warsaw and Prague are especially appealing due to lower occupational costs, with prime flagship rents 55% and 20% below the gateway city average, respectively. Prague and Vienna’s international visitor appeal adds further value. Notably, 70% of new international fashion and jewellery entrants to Warsaw since early 2024 have been aspirational or luxury brands.
US brands driving European expansion
US brands have become the largest single international origin market. While European origin brands still account for 56% of new entrant openings, US retailers represent 25% of all new international store debuts, up from 14% in 2024.
This acceleration is being driven by recent trade tariff tensions and softening consumer confidence in the US domestic market, prompting many American brands to advance their European expansion strategies. The July EU - US trade agreement has further strengthened business sentiment.
Marie Hickey, Director in Commercial Research at Savills, comments: “Recent trade tensions may have generated some macro-economic headwinds, but for US retail brands and F&B concepts, it appears to have accelerated expansion across Europe’s key cities, a trend we expect to continue considering the scale of recent funding activity into this space.”
Full report available here.