London’s West End is set for a speedy recovery according to new data released today. Colliers is forecasting that the area is on track to achieve turnover of £8.6 billion within the next 12 months.
- London’s West End is forecast to return to its historic annual turnover of over £10 billion within the next two years.
- Figures for 2021 show that turnover was up nearly a third (30%) from 2020, but still represented only 46% of pre-pandemic levels.
- Whilst UK-generated sales are recovering quickly, a lack of high-spending overseas visitors will hold back the recovery.
- West End businesses continue to call for more government support in the form of a simplified visa process, reconsideration of the decision to abolish tax-free shopping, and an extension of Sunday trading hours.
The new report, commissioned by New West End Company (NWEC) - which represents 600 retail, restaurant, hotel and property owners across Bond St, Oxford St, Regent St & Mayfair - also projects that the District will recover to its historic annual turnover of £10 billion within the next two years, and will supersede pre-pandemic levels by 14 per cent - or a further £1.4 billion - by 2025.
Last year’s turnover figures show that spending across the West End was up nearly a third (30%) from 2020, but was still only 46 per cent of pre-pandemic levels. Promisingly, domestic generated sales are recovering more quickly and are expected to exceed 2019’s figures within the next 12 months.
Despite UK visitors making a confident return to the high street, retail and hospitality businesses are facing challenges caused by the continued absence of high spending international travellers. 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 a third (33%) of those achieved in 2019.
Jace Tyrrell, Chief Executive of New West End Company: “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 turbo charge 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. Overall, we have forecast West End performance to be back to pre-pandemic levels by 2024.”
As a result, NWEC is calling on the Government for more support 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 so much to the wider economy.
Top of the asks 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 per cent price advantage over the UK, pushing it even further down the travel wish list for high-net-worth tourists.
As well as changes to visas and taxes, NWEC is asking for 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. 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 adds: “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. This means exploring a simplified visa process, reintroducing tax-free shopping and extending Sunday trading hours.
“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.”
In October last year, NWEC announced a collective planned £5 billion capital investment into the London’s West End over the next five years to diversify the district’s offering. The funding will not only help the district bounce back from the pandemic, but will also help it evolve into the destination of choice for the modern customer.
In recent months, a wide variety of businesses have also chosen to make the West End their home such as Outernet, Superdry and the Ivy Asia. Further exciting arrivals are due over the next 24 months, including an Ikea store at the former Topshop flagship site on Oxford Street, Gymshark on Regent Street and a new flagship Hugh Boss store adjacent to Selfridges.