Why London's retailers are heading to the suburbs

You might expect the most expensive place to set up shop in a new office would also be the one with the highest rents.

May 11, 2017

Brands are following neighborhood growth in London with more retailers branching out into the suburbs to appeal to a new customer base.

While areas such as Covent Garden and Oxford Street remain at the center of the capital’s retail scene, the real movement in retail is on the fringes of the capital, according to Michael Davis, Head of JLL’s London Unlimited team.

“The areas that are leading the way are the suburban areas of London because that is where the creative crowd have gathered to date,” says Davis. “So, for example, we’re seeing a very strong independent retail story in London Fields and Peckham. There is a west London pedigree as well, but the more interesting brands are largely focusing on east London.”

Shoreditch, for example, is the accepted retail destination for Hackney. Davis cites the growth of Hackney Walk, the UK’s only urban luxury outlet center, as just one example of how the gentrification of east London gave brands like Nike, Gieves & Hawkes and Aquascutum the confidence to invest in the area.

But there is also an element of cool-hunting that is driving the rapid uptake of shops in the likes of Redchurch Street, a bustling side street of Shoreditch, serving as a magnet for cutting-edge brands. The combination of kerb appeal alongside a carefully curated mix of brands has certainly contributed to putting the street on London’s retail map.

“I think the whole thing behind physical retail now is brand experience,” says Davis. “Along Redchurch Street, you have a varied mix; J Crew, Club Monaco, APC and Mast Brothers, which is a Brooklyn-based chocolate manufacturer. They have brought their craftmanship to a production and retail space on the street, which is as much about the theater of making, as it is about selling.”

Targeting fashion fans

An element of exclusivity helps, too. “You can buy anything online now, but some of these things – like new collaborations – only get released in limited amounts, released only in certain stores at certain locations,” says Davis. “For example, there is a shop inside a warehouse in Peckham called Alpha Shadows, which has exclusive rights to stock some specific Japanese brands. People will travel there for those things, because you can’t get them elsewhere.”

Davis cites the strength of British fashion and London fashion brands as another strong driver for independent retail and its growth in outlying areas of London. However, it is not just the fashion-forward cognoscenti who are being catered to.

Westfield in Stratford now has the heaviest footfall of any European shopping center. Its mainstream shopping, alongside Shoreditch’s or Peckham’s more specialist offerings, contribute to London’s wide appeal for both consumers and retailers.

And the retail scene continues to evolve. Pop-ups will, by their very nature, come and go but the next Shoreditch is unlikely to appear overnight despite some developers believing they have the formula for a successful retail enclave, says Davis.

“Shoreditch took 10 years,” he says. “It grew from a quite rough and ready independent retail area. Some of the original brands have stayed, but some have been replaced by bigger brands.”

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