The retail market, as a whole, continues to perform positively. With employment levels continuing to rise and an increase in real wage growth consumers are benefitting from more disposable income. There is also more stability following the General Election, accepting that retailers will need to adapt to changes announced in the post-election budget. Whilst the introduction of the National Living Wage has seen mixed reactions from retailers, on balance, it appears most view this as a progressive measure for workers and one which will feed through to retailers through increased consumer spend. Possible changes to Sunday trading hours in England & Wales are also expected to deliver benefits to retailers, accepting there is a need to ensure any legislation ensures Local Authorities do not pick and choose which areas of their catchment will be eligible for extended trade hours.
The economic upturn, which has, at last, surpassed pre-recession levels, continues to be good for the retail market. This is evidenced not only through strong trading and profit results from Zara and Next but the continued entry of new retailers to the UK. In this issue of Drapers Property Supplement we focus on one new entrant, Pep & Co, a discount fashion chain, who recently opened their first store and will trade from 50 UK stores by the end of 2015.
In this issue we also discuss the continued success of UK outlet centres, which have evolved from largely clearance centres for surplus inventory to vibrant and exciting destinations where people visit for a luxury retail experience. Flagship centres such as Bicester Village and Cheshire Oaks are also popular tourist destinations where people will travel from a distance to purchase out of season luxury and aspirational goods. People visit them not only to shop but to have a great day out, which can include going for a meal or attending a fashion show.
As retailers continue to capitalise on a now truly global retail market we explore Australia, which has seen an influx of foreign retailers in past few years, including from the UK Top Shop, River Island and Reiss, who are all looking to capitalise on its strong economy, young demographic and global tourist market. Sydney’s prime shopping district is now one of the most expensive in the world and with H&M recently opening one of their largest global stores in Melbourne the country is cementing its position as a strategically important region for international retailers.
As we look forward, we continue to see a positive market ahead for UK retailers and a continued need for retailers to compete at a global level as they seek to develop their brands.
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