Thanks to the Olympics and the Queen’s Diamond Jubilee, commercial property retailers in Central London will enjoy a momentous increase in turnover this year, according to research which highlights how the West End could be immune from the consumer downward spiral hitting the rest of the UK’s high streets.
Springboard, the UKs leading High Street footfall monitoring organisation has calculated in a report commissioned by New West End Company that retail sales will increase by 3.5 per cent during 2012.
Growth in retail sales are expected to be seen in the city’s major commercial shopping districts including Oxford Street, Bond Street and Regent Street, counterbalancing a slow start to the year and a bleak forecast for UK retail in 2012.
The prediction follows strong December trading as retail sales in the West End reported a sales upswing of 6.8 per cent year-on-year, driving an annual sales uplift of 3.1 per cent, nearly double the UK annual increase of 1.7 per cent. This was a direct consequence of the continued influx of Chinese, Russian and Middle Eastern tourists spending at luxury goods commercial property retailers such as Mulberry, Louis Vuitton and Burberry.
Key outcomes from the report claim that 17.8 per cent additional retail spend will happen in June and July during the Olympics and the Queen’s Diamond Jubilee, with London’s West End commercial property retailers estimated to make an additional £16.6 million in revenue as a direct benefit of the high-profile events.
The forecast comes in contrast to a recent study commissioned by BT showing that 93 per cent of British commercial property businesses expect a negative impact from the Olympic Games and almost a third of British commercial property businesses saying they were unprepared for the 2012 games.
According to research by OMD Insights, 95 per cent of consumers consider London’s West End to be one of the world’s top shopping destinations.
Chief Executive of New West End Company, Richard Dickinson, said the forecast shows that the West End is due to see healthier economic times.
He said: “Our latest forecasts indicate that the central London retail economy is likely to bounce back and can make a strong contribution.”
Maureen Hinton, retail analyst at Verdict said the West End was bound to overtake the rest of the UK retail as it had the advantage of being a leading tourist shopping destination as well as having a high-profile reputation for UK shoppers.
She said: “The forecast of 3.5 per cent growth looks achievable even though we at Verdict are predicting a 0.5 per cent fall in non-food sales for total UK retail in 2012.”
The mayor of London, Boris Johnson, said commercial property businesses throughout the West End have a unique opportunity to reap the benefits when visitors come to London in 2012.
He said: “London undoubtedly has the best shopping district in the world and I have every confidence that retailers are doing all they can to plan, prepare and profit from the games.”
Julia Carrick, Chief Executive of luxury brand thinktank Walpole, said British high-end brands were enjoying a renaissance with products by Mulberry and Burberry going from strength to strength in the UK and internationally.
She said: “With all the eyes on London this year, tourists will be flocking more than ever to own a piece of British heritage.”
Chief Executive of promotional organisation London & Partners, Gordon Innes, called the figures extremely encouraging. He said London’s West End, with its exceptional mix and variety of retail, was “second to none”.
He said: “We have a huge opportunity this year to showcase what London has to offer every visitor; highlight its commercial successes and fully harness the attraction of the capital’s retail opportunities.”
