How international retail brands are reshaping the U.S. market
Expanding retailers in the United States face a daunting landscape: historically low availability of quality space and constantly rising rents. The development downturn due to high interest rates, soaring construction costs, and shifting economic conditions has brought new retail development to a multi-decade low. The competition among brands for desirable locations is fierce.
Despite this challenging environment, a new wave of international brands has arrived. Notable names include Me + Em, Gym Shark, and WatchHouse Coffee from the U.K.; Urban Revivo, Uniqlo’s GU concept, and Pop Mart from Asia, and Princess Polly and Culture Kings from Australia.
Foreign retailers continue to predominantly enter the U.S. via gateway cities such as New York, Los Angeles, and Miami. However, the pandemic-era remote work movement sparked migration into high-growth metro-suburban areas that were once secondary targets like Dallas and Phoenix.
Their entry faces significant obstacles. The sheer vastness of the U.S. and unique complexities of its many large markets present logistical hurdles. JLL has worked with numerous foreign brands to provide strategic guidance needed to secure optimal locations and avoid costly missteps.
The challenges often lie in operational details. Seemingly minor issues like loading access, permitting timelines, or signage limitations can severely impact store performance if not addressed during lease negotiations. Lease structure expertise becomes particularly crucial, as critical terms such as percentage rent thresholds, co-tenancy requirements, and termination options can make or break long-term profitability.
Established landlord relationships prove invaluable in competitive markets. Experienced partners can identify opportunities early, facilitate introductions, and leverage existing relationships to negotiate favorable terms that might otherwise be inaccessible to unknown international brands.
The unpredictability of tariffs creates risks that can stall expansion, yet it also provides strategic incentive for brands to deepen their investment in the American market as a crucial hedge against global volatility.
Brand Establishment Strategy
International retailers’ successful entry into the American market relies heavily on understanding the U.S. landscape and identifying their target customer bases. Without U.S. performance histories, international retailers typically rely on wholesale partnerships and direct-to-consumer e-commerce data to understand American consumer preferences.
The value proposition centers on brand establishment rather than purely transactional metrics. Prime locations serve as powerful brand-building tools, conveying credibility and strengthening brand identity in ways that secondary locations cannot. Their ability to diversify capital expenditure across global operations provides financial flexibility to secure flagship spaces that domestic retailers might find prohibitive.
These new arrivals often place greater emphasis on market research and third-party demographic analyses to compensate for their lack of local operational data. They frequently prioritize locations with proven international retail success or partner with experienced local developers.
Many choose to outsource substantial portions of store design and construction to local partners who understand U.S. market preferences and regulatory environments. This approach can accelerate timelines by leveraging local expertise, though it requires careful coordination to maintain brand standards across different execution teams.
JLL expects foreign retail migration to continue at a steady pace, led by brands from China, South Korea, Japan, Australia, and Europe. Social media’s influence provides direct access to customers worldwide, transforming how global brands build awareness before entering the U.S. Smart brands understand the benefits of influencers and brand collaborations. Smarter brands understand the benefits of working with an experienced partner like JLL that mitigates risk and provides strategic foresight to maximize the return on one of the most significant investments a brand will make.
