London's West End to recover within two years - report
The decline of small shopping centres and the devastation the pandemic caused in London’s West End have been two of the big retail stories of the Covid crisis. But while small and less powerful malls continue to struggle to attract tenants, it seems the West End’s recovery is already happening.
And a new report on Thursday — commissioned by business body New West End Company (NWEC) and executed by global property consultancy Colliers — suggests that the recovery in one of Europe’s premier shopping districts should be complete within the next two years.
The West End is predicted to achieve a turnover of £8.6 billion this year but should reach its pre-pandemic level of £10 billion by 2024. And turnover should beat pre-pandemic levels by as much as 14% — or a further £1.4 billion — by 2025.
Yet that doesn’t mean the post-pandemic neighbourhood will be the same as its pre-pandemic self.
Already, a number of big names have disappeared from Oxford Street in particular — with Topshop being the biggest headline-grabber to be replace by Ikea — and stores like John Lewis and M&S are converting some space to offices.
The Colliers data showed that the source of sales is also changing. Most of the turnover is now coming from domestic shoppers rather than the international visitors who were once the driving force of the area. And NWEC has called on the Government to put a number of simple measures in place to encourage overseas tourists back to London W1 and to British high streets in general.
Figures for 2021 show that turnover was up 30% from 2020, but still represented only 46% of pre-pandemic levels, which was hardly a surprise given how footfall was down to around half of the usual numbers at various points in the year. Promisingly, 2021’s domestic-generated sales are recovering more quickly and are expected to exceed 2019’s figures within the next 12 months.
That’s an undeniably good development, but the continued absence of high-spending international travellers remains a problem.
“This lack of overseas shoppers is most apparent across Regent Street, Bond Street and Mayfair — which traditionally rely on tourism – with 2021 sales reaching on average only 33% of those achieved in 2019”, Colliers said.
TOURISTS ARE KEY
Jace Tyrrell, NWEC’s Chief Executive, said: “Nearly two years on from the start of the pandemic and the road ahead for the West End looks promising with the long-anticipated opening of the £19bn Elizabeth Line set to turbocharge our recovery. Whilst it is heartening to see domestic customers filling our high streets with optimism once again and travel restrictions gradually disappearing, we can speed up the nation’s recovery greatly by incentivising high-spending tourists to return to our shores.”
Paddy Gamble, Co-Head of Retail Strategy at Colliers added: “Our data has highlighted how the mix of shopper groups and origin of footfall has meant that recovery in 2021 was not equal across all parts of the West End. Areas with much greater levels of domestic trade have, and will continue, to recover quickest with UK-generated sales to hit pre-pandemic levels by 2023. However areas with much greater reliance on tourists and international visitors will take longer to return to the levels of footfall and sales witnessed before the Covid lockdowns.”
NWEC wants the Government to work harder to help entice overseas holidaymakers back to the UK, a group that historically accounts for half of the West End’s annual turnover and contributes a lot to the wider economy.
Top of the wishlist is a simplification of the UK’s visitor visa system, “which has fallen behind those offered by competing destinations such as Paris and Milan”, and a reconsideration of the abolition of tax-free shopping. Since its abolition last year, other major world cities have benefited from a 20% price advantage over the UK, pushing it even further down the travel wishlist for high-net-worth tourists.
And it wants an extension to Sunday trading hours. “International shoppers are often disappointed to find that stores are forced to close by 6pm on a Sunday, limiting potential spending”, it said. NWEC believes that it is “crucial that retail businesses are given the opportunity to cater to weekend city break shoppers, with its own research estimating that — by removing this barrier from designated international centres such as the West End — an additional £250 million worth of sales would be generated annually at no extra cost”.
Tyrrell added: “For us to succeed long-term we need to ensure that London’s West End and the wider country remains globally competitive to alternative world cities. We’re in good stead to build back better, but we must clear a path if we want tourists — who generate an estimated £237 billion across the UK every year and support one in eight London jobs — to flock back to our high streets.”
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