RETAIL RENAISSANCE IN CENTRAL LONDON

In mid-June 2020, the first lockdown in the UK due to covid19 pandemic ended. High streets were still relatively empty, but few consumers were brave enough to return to recently reopened retail outlets, willing to enjoy the experience of physical store shopping again beside the restrictions and safety measures. Famous high streets, such as Oxford or Regent in London, saw how many well-known brands would close later their branches, letting desolated empty buildings and retail spaces.

Last bank holiday weekend in the UK, almost three years after, high street footfall has yet to recover the numbers of the same period in 2019. However, the rise in street footfall compared with previous years following the pandemic lockdowns is constantly increasing, and we estimate that 2024 could be the year with a near-performance to the numbers seen in 2019.  

Global and domestic circumstances are impacting a faster recovery, such as the invasion of Ukraine and its repercussion of high inflation and interest rates, the cost of living crisis, low consumer confidence, post-Brexit economic consequences and loss of wealth in society as the result of the international and national turmoil with the impact of the spread of social demands and industrial actions. On the other side of the retail spectrum, brands have been forced to increase prices to cope with the rise in raw materials and supply chain costs to mitigate the drop in margins and keep the competitiveness of their organisations.

With this panorama in mind, it sounds very optimistic to predict a positive recovery of the retail landscape one year from now, but there are clear visible signals of that recovery in the UK and especially in Central London:

·  International brands have pointed out the UK market for their growth strategies, such as the Spanish MANGO, the French SEPHORA, the American Under Armour, the Japanese UNIQLO and the Polish RESERVED.

·  The empty buildings of Debenhams, Next and House of Frasers on Oxford Street are currently under construction to be occupied with new retail offerings by 2024, and Westminster Council has urged retail unit owners to terminate or cancel Candy shops tenant contracts to revamp the street with new retailers that fit better to an international shopping high-street.

·  Since the end of 2022, critical retail relocations, new openings and refurbishments in Central London’s primary shopping spots have occurred. We have seen the opening of the Battersea shopping centre, new international tenants in Westfield shopping centres and a special mention to Oxford and Regent Street landscape. Some examples of this high street revamp include the openings of Gymshark, ON, Superdry, and Uniqlo stores, followed by the relocations of Lacoste and Abercrombie and the refurbishment of BOSS stores.

·  There are more investments to come next months, with the opening of Under Armour and Reserved in Oxford Street and the possibility of a new Uniqlo store in Oxford One, the large unit close to Tottenham Court tube station.

We acknowledge that the war in Ukraine will still last for a long time, as well as some of its consequences and that the cost of living crisis will extend during 2024. Still, we understand that organisations making such investment decisions are looking to the long-term considering London one of the most relevant shopping places in the world. The renaissance of Retail in Central London is now.