The Global Cities selected for benchmarking were those, like London, that are key destinations for international visitors, plus are those where shopping is a key tourist activity and/or attraction of the city. This process identified New York, Paris, Hong Kong, Singapore and Dubai as suitable comparator cities. Milan was included due to its ‘fashion capital’ reputation (see Table 1).

In each of the Global Cities, comparator retail locations to those of the prime retail streets of the West End, Bond Street, Regent Street and Oxford Street (western end) were also identified. This was to allow for some level of ‘like-for-like’ comparison in terms of retail offer.

^{Source: Savills Research; The Retail Group; Oxford Economics; MORI}

Global retail city destination ranking

The top ranking Global Retail City from the analysis is New York. London’s West End ranked second alongside Hong Kong, followed by Dubai. New York’s top position was driven by its top ranking ‘perception’ score and its strong ‘physical’ score.

Based purely on quantitative metrics, London’s West End is the top ranking Global City (Figure 1). It ranked 5th in its qualitative ‘perception’ score’. (Figure 2). The fundamentals that make London an attractive place to visit (cultural appeal, airline accessibility etc), which in turn attracts new international retailers which improves the quality and variety of its retail environment, are sound. It is these fundamentals that no doubt supported the 96% of London’s West End survey respondents who would recommend it as a place to trade, the highest proportional response across the Global Cities.

^{Source: Savills Research; Oxford Economics; MORI}

^{PHYSICAL (retail sales, tourist flows, property costs, retail mix)}

^{Source: The Retail Group}

^{PERCEPTION (quality of shopper services, facilities, public realm, perceived issues, marketing initiatives)}

Savills, in partnership with The Retail Group, devised an approach to assess the ‘physical’ quantitative metrics (retail sales, tourist flows, property costs, retail mix) and more ‘perception’ qualitative features (quality of shopper services, facilities, public realm, perceived issues and marketing initiatives) of London’s West End. The ‘physical’ and ‘perception’ attributes were scored separately with both scores combined in order to rank the Global Cities.

The ‘physical’ score, which drew on various weighted data metrics, was broken down to generate separate scores in regards to retailer and visitor attractiveness, and retail offer. This was designed to assess those factors which makes a city, including its more localised areas, attractive to international visitors and retailers.

The ‘perception’ score was derived from retailer surveys in each of the Global Cities, with over 1,500 surveys distributed in total. The survey deployed consisted of 50 questions grouped around quality of welcome/service; facilities; problem areas; marketing activity; themed events; and general satisfaction. Approaching retailers rather than shoppers drew on the surveying experience of The Retail Group in that they tend to be more aware of the strengths and weaknesses related to the shopper and retailing experience in their local area than those visiting.

^{Note*: Premier International flagship locations based on it having some luxury brand flagships but not exclusively.}

^{Note**: Dubai Mall locations were based on their brand positioning in comparison to the key retail destinations in the West End. As a result each ‘strip’ in the mall was treated like a ‘street’.}

London topped Mastercard’s Global Destination Cities Index again in 2015 attracting 18.8m overseas visitors spending a total of £13.2bn (US$20.2bn) (see Table 3). This influx of international tourists alone has raised London’s, and the West End’s, attractiveness to retailers as a place to trade.

London’s West End retail sales profile, including tourist expenditure, is reflected in the influx of new international retail brands that have opened their first store in the city. Between January 2014 and December 2015, 57 retail brands opened their first ever store in London, 60% of which were located within the West End. If new international restaurant operators and gallery openings were included the number increases to 77. With a further 13 new international brands already committed in the pipeline for 2016, London and the West End’s retailer appeal continues.

Additional attributes such as domestic retail spend and total occupational costs, along with the tourist metrics, were examined across the seven global cities in order to rank their attractiveness from a retailer perspective. The results from this analysis ranked London second to New York (see Figure 3).

^{Source: Mastercard}

^{Source: Savills Research; Oxford Economics}

^{PHYSICAL (retail sales, tourist flows, property costs, retail mix)}

New York’s top ranking position was driven by its retail sales volume; including that on personal luxury goods and inbound travel spend per visitor in 2015. According to Oxford Economics, retail sales in New York totalled approximately £168.9bn (US$258.3bn), in London it was £121.7bn (US$186.2bn) (see Figure 4). A similar pattern exists when examining this on a per capita basis with annual retail spend in the region of £8,500 (US$13,000) per inhabitant in New York, marginally higher than the £8,200 (US$12,500) reported for London.

This difference is also reflected in luxury sales. Altagamma & Bain (consultants focused on the luxury industry) estimated that New York had the highest level of personal luxury goods spend totalling £16.3bn (US$24.9bn) in 2014, twice that of second and third placed Paris and London with £8.2bn (US$12.6bn) and £7.4bn (US$11.3bn) respectively.

The gap in retail sales between the two cities is set to narrow with the growth in London’s retail sales forecast to outpace that of New York with average growth of 2.9% per annum through to the end of 2020; 2.7% per annum is forecast for New York (see Figure 4). Dubai is expected to report the most rapid level of growth over the same period although this does reflect growth off a lower base.

^{Source: Oxford Economics}

^{PERCEPTION (quality of shopper services, facilities, public realm, perceived issues, marketing initiatives)}