Walpole, the industry body that represents more than 250 British luxury companies, has published its inaugural ‘State of London Luxury’ report in partnership with Cadogan, which manages more than 90 acres of Chelsea and Knightsbridge and is calling for the reinstatement of a tax-free shopping scheme for international visitors.
The report, which is set to be published annually moving forward, serves as a barometer of London's position as a world-leading luxury goods market, examining the drivers behind the success of the city, as well as exploring opportunities for future growth, as it projects that the luxury sector in London could reach a value of 28 to 30 billion pounds by 2024.
The 2023 Walpole Luxury London Survey, which features in the report, reveals that 71 percent of respondents expressed positivity about the prospects for their business at present, a sentiment it adds rises to 81 percent over the next two to three years. An optimism it states echoed by Savills Luxury City Fundamentals ranking 2022, which positions London second only to New York when comparing the size of the retail market, international visitor appeal, affluence and growth potential.
London’s appeal is further underscored by its status as the prime destination for high-end tourism, with 50 percent of UK international visitors choosing the capital as their primary stop pre-pandemic. Its research adds that high-end tourists in London outspend mass tourists by 14 times per trip and double that of high-end visitors to other European cities. This is being helped by the opening of 12 new 5-star hotels between 2022 and 2025, which will continue to attract more high-end visitors.
The survey also shows that 82 percent of respondents believe the blend of well-known luxury brands and local British luxury icons is a major contributor to London’s distinctiveness in the luxury landscape. Renowned luxury retail districts, including Knightsbridge, Chelsea, and Mayfair, have attained global acclaim, and 69 percent of respondents ranked Bond Street among the world's top three luxury streets.
However, Walpole notes that London's affluent “villages,” such as Connaught Village, Marylebone Village, Little Venice, and Shoreditch, offer hyperlocalisation, unique character and trend-led retail and dining experiences “that can’t be found anywhere else in the world”. It is these affluent villages that it states have positioned London “as a global leader in growth and investment”.
London's luxury sector could reach a value of 28 to 30 billion pounds by 2024, new report from Walpole and Cadogan states
To further London’s growth, Walpole is lobbying the government to reinstate a tax-free shopping scheme for international tourists, following the UK’s departure from the European Union, stating that the loss is “a drag on both London’s and the UK’s economic performance”.
The report adds that “every passing year without the scheme entrenches the view of London as a more costly place to visit and a less competitive place to do business as international visitors become increasingly aware of the loss of this vital policy”. The impact of the decision can already be seen, adds the report, as in 2022, US visitors were spending at 101 percent of 2019 levels in London, but 226 percent, 206 percent and 190 percent in France, Spain and Italy respectively.
Walpole adds that “with a different policy approach from government, it would be possible to further optimise its attractiveness as a city to visitors, businesses and investors alike”.
Helen Brocklebank, chief executive officer at Walpole, said in a statement: “If a next-generation tax-free shopping scheme could be introduced, London’s status as the world’s number-one luxury city would be guaranteed.”
The return of the policy would “be a windfall for the whole UK, including London,” adds the report. It would add 4.1 billion pounds to the UK economy and create an additional 78,000 jobs. While London would be a significant beneficiary of this policy, the impact would reach far across the country – as even those goods sold in London are made throughout the UK.
Walpole and Cadogan also note that the government should extend the Electronic Visa Waiver to other high-spending markets beyond the GCC, particularly to the Far East. Likewise, a joint UK/Schengen visa would significantly reduce the complexity for international visitors planning a trip to Europe.