West End on track to hit £10bn turnover target

London’s West End is on track to reach an annual turnover of £10bn by 2025, according to research from the New West End Company and Colliers. The submarket saw year-to-date sales rise by 56% last year compared with 2021, despite experiencing a slow recovery driven by economic uncertainty and the cost-of-living crisis, the report found. In 2022, turnover reached £8bn, a 56% increase on 2021 but still 11% below 2019 levels. Data uncovered a post-pandemic shift in consumer habits, with customers visiting the area less frequently but spending more money. This is partly driven by high-spending overseas shoppers, who outperformed the expected rate of recovery at the end of 2022. It is expected the overall volume of international visitors will have fully recovered to pre-Covid levels by early next year. The three most successful retail sectors were health & beauty, which was up by 7% on 2019, electrical goods up by 4% on the same period and department stores, which remained consistent with 2019. Sales for the next two years are anticipated to be lower than 2022 predictions, as retail spending feels the effects of rising inflation and the cost-of-living crisis, the report found. Dee Corsi, chief executive of New West End Company, said: “The influx of international visitors towards the end of last year was a welcome boost, but we must be aware that they are not returning at the same rate as destinations such as Paris and Milan, largely due to the offer of tax-free shopping on the continent.” The report called on the government to reintroduce tax-free shopping in the UK, and the relaxation of Sunday trading laws in the West End and Knightsbridge, in order to keep up with international rivals. The area has welcomed new tenants in 2023, including Ikea at Oxford Circus, Reserved and Pandora’s new concept stores with the immersive Twist Museum and adventure-themed Boom Battle Bar. Corsi added that increased demand in the area is partly driven by the reduction in business rates across the capital and the growth of “hyperphysical retail, where brands are rejuvenating and investing in their physical stores to create an entertaining, memorable shopping experience that cannot be replicated online”. Paddy Gamble, co-head of retail strategy and analytics at Colliers, said: “Following on from two years of an online-first approach to retail, visitors are viewing shopping trips to the West End as more of an occasion, coming with a much greater intent to spend and tying in trips to restaurants and other experiences. “At the same time, the return of international visitors has helped accelerate the recovery and push sales performance close to 2019 levels. The opening of the Elizabeth Line has really boosted accessibility, making it far easier for people to visit and plan their trips from across London and beyond.” See which agents are doing the most deals in the West End >> View market analytics for the West End >> Image © Vuk Valcic/SOPA Images/Shutterstock