The draw of the retail markets of both these global cities is assured. However, by examining a wider range of features related to retail sales, demographic drivers, tourist flows and spend, total occupational costs and appeal to international shoppers, we hope to identify other retail cities that may also offer more immediate opportunities. All the cities included in this analysis are the prime retail destinations in their respective countries. As such they would be key target markets for expanding retailers.

London topped the Index, closely followed by Paris in second place. Across the ‘smaller’ European cities Barcelona and Amsterdam both performed well (Figure 1).

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

The various drivers behind the Index are explored in the following pages but one key element to note is that the ‘opportunity’ for retailers is not solely determined by the cost of operating a store.

Total occupational costs provides some insight into the sales opportunity and demand associated with different markets. The traditional thinking dictates that the higher the occupational cost, the greater the sales revenue associated with that particular market and in turn the demand for space.

This is reflected in the fact that Paris and London are the most expensive cities in regard to total retailer occupational costs (based on prime/luxury retail areas excluding staff costs, Figure 2).

^{Source: Savills Research}

Yet, where a disconnect has developed between retail sales potential and store costs, these markets could prove more attractive to expanding retailers as it suggests the profitability of these locations could be greater.

It is this disconnect, amongst other features, that helped place London above Paris in the Index and it also explains why Amsterdam ranked third, despite having relatively small retail and visitor markets compared to its peers.