London named Europe’s top retail destination
London has overtaken Paris as the European retail location, offering the best opportunities for expanding international brands.
According to Savills’ latest European Retail Destination Index, London’s success is due to its underlying operational fundamentals related to retail spend and tourist flows: factors further enhanced by London’s ‘opportunity’ potential for new retail entrants and total occupational costs, which are 6.7% cheaper than Paris.
International tourists visiting London spent a total of €17.8 billion in 2015/2016, 53.5% more than the level recorded for Paris. When looking at the proportion dedicated to shopping, the difference is even more pronounced: according to Mastercard, visitors to London tend to allocate 46.7% of their total spend to shopping, compared to 16.7% in Paris.
“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,” says 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.”
Marie Hickey director of retail research at Savills said: “The revenue potential of London and its lower occupational costs suggest the profit margin offered by a store there may be greater than that of a similar store in Paris. This will enhance its appeal to new international entrants, hence its place at the top of our European Retail Destination Index.”
According to Savills, London offers 13.1 stores per 1 million of population and 3.9 stores per 1 million of international tourists, while Paris has 17.3 per 1 million of population and 5.9 stores per 1 million of international tourists.
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.
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