London has been identified as Europe’s top retail destination by international retail estate advisor Savills.
According to the property firm, London’s success is due to its underlying operational fundamentals related to retail spend and tourist flows.
These factors have been further enhanced by London’s ‘opportunity’ potential for new retail entrants and total occupational costs, which are 6.7% cheaper than Paris.
Separate research by Mastercard found that London has overtaken Paris with a record 19.8 million international tourists spending a total of €17.8 billion in 2015/2016.
This level of spend is 53.5% above that recorded for Paris and is even more pronounced when looking at the proportion dedicated to shopping. Visitors to London tend to allocate 46.7% of their total spend to shopping, says Mastercard, compared to 16.7% in Paris.
More recently, spending by overseas visitors in London received an added boost from the Brexit vote due to its impact on the value of the pound.
The average price of luxury goods in London is now 13% lower than in Paris.
As a result, London’s West End saw a 3% annual increase in retail sales in July 2016, the month immediately following the EU referendum.
Marie Hickey, director of retail research at Savills, commented: “While this measure did not feed into the European Retail Destination Index, it does highlight the importance of visitor appeal in determining the attractiveness of a location to new international brands.”
London offers 13.1 stores per 1 million of population and 3.9 stores per 1 million of international tourists. This compares to Paris with 17.3 and 5.9 stores respectively.
For international brands looking to expand, this would suggest that competition may be less pronounced in London, albeit this will be largely dependent on the nature of their product offer and existing competition.
“The appeal of London and Paris to expanding international brands is unrivalled in Europe, however recent terror attacks have impacted Paris’s international visitor numbers, and their spending,” said Lydia Brissy, director of European research at Savills.
“Significantly, the city remains a hugely desirable destination with total retail sales for the wider Paris region by far exceeding that seen for Greater London, ensuring its appeal to prospective retailer entrants.”