The State of London Luxury Report indicates the vast stabilisation of the luxury sector in the UK post-pandemic. Walpole’s The State of London Luxury report 2023, produced in association with Cadogan, delves into London’s position as a global luxury capital.
Walpole, the sector body for British luxury brands, has published its inaugural State of London Luxury report in partnership with Cadogan. The comprehensive report examines London’s status as a global luxury capital, analyses the drivers behind its success, explores opportunities for future growth, and identifies policy measures necessary to unlock its potential, including the reinstatement of a tax-free shopping scheme for international visitors.
The State of London Luxury Report, published by Walpole in partnership with Cadogan, sheds light on the significant stabilization of the luxury sector in the UK after the challenges posed by the pandemic. This comprehensive report examines London’s role as a global luxury capital, delving into the drivers behind its success, exploring future growth opportunities, and identifying necessary policy measures to unlock its potential.
The report takes a deep dive into the unique ecosystem that encompasses luxury retail, hospitality, culture, infrastructure, and the presence of affluent customers, both residents and visitors. It serves as a barometer of London’s position as a world-leading luxury goods market, highlighting current trends such as hyper-localization and luxury villages that define the city’s luxury landscape.
According to forecasts, the luxury sector in London is expected to reach a value of £28-30 billion by 2024, emphasizing the substantial contribution of a thriving London to luxury manufacturers and suppliers throughout the UK, generating employment opportunities across the country.
The 2023 Walpole Luxury London Survey featured exclusively in the report presents 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 their business prospects at present, a sentiment that rises to 81% over the next 2-3 years. Savills Luxury City Fundamentals ranking 2022 also supports this optimism, positioning London second only to New York when comparing retail market size, international visitor appeal, affluence, and growth potential.
Helen Brocklebank, CEO of Walpole, emphasizes London’s significance by stating, “London is the UK’s shop window – a vibrant, exciting, and immersive display of the very best of this country.” London’s appeal is further underscored by its status as the prime destination for high-end tourism, with 50% of UK international visitors choosing the capital as their primary stop pre-pandemic. Furthermore, high-end tourists in London outspend mass tourists by 14 times per trip and double that of high-end visitors to other European cities.
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To cater to the growing demand, London is set to witness the opening of 12 new 5-star hotels between 2022 and 2025, surpassing any other period of hotel development in the city. Renowned luxury retail districts like Knightsbridge, Chelsea, and Mayfair have garnered global acclaim, while London’s affluent “villages” such as Connaught Village, Marylebone Village, Little Venice, and Shoreditch offer unique character and trend-led retail and dining experiences that cannot be found elsewhere.
London’s status as a global leader in growth and investment is further supported by its high number of High Net Worth Individuals (HNWIs) compared to any other city worldwide. Understanding and profiling local residents is identified as a key success criterion for luxury brands, and added value services such as personal shopping and tailored experiences enhance the customer journey.
Investments in the public realm and placemaking initiatives, exemplified by Cadogan’s Sloane Street and Pavilion Road developments, enhance the retail and residential environment for affluent visitors and residents. With over a third of HNWIs looking to buy another property in the UK, the potential for attracting luxury customers continues to grow.
The report not only highlights the resilience of London’s post-pandemic growth but also addresses the opportunities for unlocking future growth through policy measures. One significant opportunity lies in the reinstatement of a tax-free shopping scheme for international tourists, which would optimize London’s attractiveness as a city for visitors, businesses, and investors.