London beats Paris as Europe's top retail destination

The City of London has been crowned as Europe's top retail location in Savills latest European Retail Destination Index, which aims to highlight the best opportunities for international brands.

London's ongoing success as Europe's leading retail destination has been linked to the city's tourist flow and unique store assortment, which includes a number of leading luxury and mass-market fashion brands ranigng from Dior to Primark. In addition, total occupational costs for retailers are said to be 6.7 percent cheaper in London than in Paris, making it even more attractive to international brands.

London hailed as Europe's leading retail destination

"The appeal of London and Paris to expanding international brands is unrivalled in Europe, however recent terror attacks have impacted Paris’s international visitor numbers, and their spending," says Lydia Brissy, director of European research at Savills. "Significantly, the city remains a hugely desirable destination with total retail sales for the wider Paris region by far exceeding that seen for Greater London, ensuring its appeal to prospective retailer entrants."

The city has overtaken Paris, according to data from Mastercard, attracting a record 19.8 million international tourists who spend a total of 17.8 billion euros (15.2 billion pounds) in 2015/2016. This level of spend is said to be 53.3 percent more than the amount recorded for Paris. What's more, visitors to London allocated 46 percent of their total spend to shopping, whereas visitors to Paris only 16.7 percent, according to Mastercard.

"The revenue potential of London and its lower occupational costs suggest the profit margin offered by a store there may be greater than that of a similar store in Paris," added Marie Hickey, director of retail research at Savills. "This will enhance its appeal to new international entrants, hence its place at the top of our European Retail Destination Index."

International tourists spend in London also received an additional boost from the Brexit vote due to its impact on the value with a Pound, which led to a 3 percent annual increase in retail sales in July. "While this measure did not feed into the European Retail Destination Index, it does highlight the importance of visitor appeal in determining the attractiveness of a location to new international brands," added Hickey.

The announcement comes not long after the New West End Company confirmed that London's West End was on its way to becoming the first retail district in the world to generate 11 billion pounds in annual turnover by 2020.

Photos: Oxford Street, FashionUnited