London is a city renowned for its vibrant fashion scene and timeless elegance. With its iconic department stores, high-end boutiques and luxury shopping districts, the capital is a haven for those seeking an extraordinary retail experience.
From the opulent charm of Bond Street to the exclusive offerings of Knightsbridge, this article delves into the world of luxury shopping in London, where discerning shoppers can indulge in exquisite fashion, accessories and a touch of sophistication.
A vital and vibrant global hub for luxury brands
London, the iconic city that serves as the shop window for the UK, has solidified its position as a world-leading luxury goods market. The recently published ‘State of London Luxury’ report by Walpole, in partnership with Cadogan, delves deep into the unique ecosystem that encompasses luxury retail, hospitality, culture, infrastructure and affluent customers.
This comprehensive report sheds light on London’s success as a global luxury capital, identifies key drivers, explores future growth opportunities and emphasises the need for policy measures to unlock its full potential. Let’s take a closer look at the key findings.
London’s status as a luxury hub
The report analyses London’s performance as a luxury hub, highlighting its crucial role for luxury brands and its ability to drive prosperity.
Forecasts indicate that the luxury sector in London could reach a value of £28-30bn by 2024, underscoring the significant contribution of a thriving London to luxury manufacturers and suppliers across the UK, creating employment opportunities throughout the country.
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Current perceptions and optimism
The 2023 Walpole ‘Luxury London Survey’, featured exclusively in the report, reveals the current perceptions among respondents regarding London’s status as a global luxury hub, the future of high-end retail and their confidence levels.
Encouragingly, 71% of respondents express positivity about the prospects for their business at present, a sentiment that rises to 81% over the next 2-3 years. This optimism aligns with Savills Luxury City Fundamentals ranking 2022, which positions London as second only to New York in terms of the retail market size, international visitor appeal, affluence and growth potential.
London as a prime destination for high-end tourism
London’s appeal as a top global destination is further emphasised by its status as the prime choice for high-end tourism. Even pre-pandemic, 50% of UK international visitors chose the capital as their primary stop.
High-end tourists in London outspend mass tourists by 14 times per trip and double the spending of high-end visitors in other European cities. To cater to this demand, London will witness the opening of 12 new 5-star hotels between 2022 and 2025, surpassing any previous period of hotel development in the city.
Cultural offerings and luxury consumers
With the UK’s high-end tourist market valued at £35bn, London’s position as a global leader in luxury growth and investment is indisputable.
The city boasts numerous visitor attractions, including 17 out of the 25 most visited tourist landmarks in the UK, six Historic Royal Palaces, four UNESCO World Heritage Sites, 215 museums (including 11 national museums), 857 art galleries and various annual cultural and sporting events. These offerings contribute to longer dwell times and increased spending by luxury consumers.
The interplay between art and luxury
The ‘State of London Luxury’ report also explores the interrelated art and luxury sectors, highlighting London’s critical influence in the art world. Luxury brands consistently draw inspiration, philosophy and partnerships from the art realm.
To nurture this inspiration, luxury brands allocate a portion of their annual revenues (0.5% to 1%) towards artistic and cultural patronage.
London’s luxury retail landscape
London’s vibrant hospitality scene is mirrored in the realm of luxury retail, with the city leading the world in terms of new store openings between 2019 and 2022, surpassing even Chinese cities in volume.
Renowned luxury retail districts such as Knightsbridge, Chelsea and Mayfair have gained global acclaim, with Bond Street ranking among the world’s top three luxury streets according to 69% of survey participants.
Moreover, London’s affluent “villages,” including Connaught Village, Marylebone Village, Little Venice and Shoreditch, offer unique character, trend-led retail, and dining experiences that cannot be found anywhere else.
London’s affluent residents and investment opportunities
The presence of affluent local residents further strengthens London’s status as a global leader in growth and investment.
London currently boasts the highest number of High Net Worth Individuals (HNWIs) compared to any other city worldwide. Understanding and profiling local residents is a key success criterion for luxury brands, prompting them to provide added-value services such as personal shopping, styling, direct delivery and personalised in-home tailoring and fitting.
Unlocking future growth through policy measures
The State of London Luxury report highlights the opportunities to unlock future growth from a policy perspective.
One significant opportunity lies in the reinstatement of a tax-free shopping scheme for international tourists, which was discontinued. Reintroducing this scheme would optimise London’s attractiveness to visitors, businesses and investors, further cementing its status as the world’s premier luxury city.