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Shopping from the comfort of your couch vs. city centre experience: How are high streets worldwide doing after Covid-19?

Verena Bauer • 15/12/2022
Blog Mainstreets across the world Blog Mainstreets across the world

Prior to 2020, the shopping trend was already clearly away from stressful bag lugging and towards decelerated online shopping. Then Covid-19 came along and many saw it as another nail in the coffin of bricks-and-mortar retail. But things were to turn out differently. 

Although still confronted with economic uncertainty, the future of traditional retail is now being talked about again - as an important component of an omnichannel world. In this, the most successful brands will better understand their customers and come to them wherever they are. The ways to achieve this are as diverse as the products themselves and range from new formats and changed presentation methods to new locations.

These activities give cause for optimism, even if the forecasts for the global economy predict further challenges. This is because many brands are planning for the long term and see the crisis as an opportunity to break out from the well-trodden path. At the same time, new concepts are emerging to set themselves apart from competitors. Above all, the experiential character of retail and shopping as an event play a major role here.


Rental prices recovering at different rates

The increased confidence in bricks-and-mortar retail of the future is now also reflected in the rental prices of the world's largest shopping high streets. While prices here fell by a full 13 percent on average worldwide during the pandemic, they have now recovered significantly and are only 6 percent below pre-Covid-19 levels.

A detailed look at the Asia-Pacific region shows that rents there are currently still 12 per cent lower on average than before Covid-19. India has recovered, thanks to strong domestic consumption. In contrast, this recovery process has been slower in Australia, Singapore and Japan, where restrictions have been eased more cautiously and borders opened later. 

Blog Mainstreets Abbildung 1 Blog Mainstreets Abbildung 1
Figure 1: Change in rents compared to the pre-pandemic period and change compared to the previous year for selected markets. (Source: Cushman & Wakefield)

Similar trends are apparent in Europe, where rents are 8 per cent below pre-Covid-19 levels. The recovery is being slowed by economic headwinds from the Russia-Ukraine war. However, a quarter of European markets (13 of 52) - including retail locations in Rome, Oslo, Vienna and Milan - are achieving rent levels equal to or even above pre-pandemic levels. 

The Americas, especially thanks to the USA, are the region that has weathered the downturn best. Here, average rents have recovered significantly and are currently around 15 per cent above the pre-pandemic level.

In comparison of the major shopping streets worldwide, Fifth Avenue in New York leads the ranking as the most expensive high street in the world. It is followed by Tsim Sha Tsui Road in Hong Kong and Via Montenapoleone in Milan. The German high streets, on the other hand, are inexpensive in international terms. Kaufinger Strasse and Maximilianstrasse are ranked 23rd and 25th, while Berlin's Tauentzien is 27th in the global ranking.

 

 

Ranking

City

Location

Rent
(EUR/sqm/year)

Comparison pre-
Covid-19

Comparison previous year

2022

1

Milan

Via Montenapoleone

€14,547

9%

7.1%

2

London

New Bond Street

€14,346

-11%

-7.0%

3

Rome

Via Condotti

€12,413

2%

0.0%

4

Paris

Avenue des Champs Elysees

€11,069

-18%

-4.3%

5

Paris

Rue St. Honoré

€9,641

-10%

0.0%

6

Paris

Avenue Montaigne

€9,284

-7%

3.2%

7

Zurich

Bahnhofstraße

€8,927

-3%

-1.1%

8

Paris

Rue du Faubourg St Honore

€8,213

-15%

-5.7%

9

Paris

Place Vendôme/Rue de la Paix

€7,499

-22%

-13.9%

10

Rome

Piazza Di Spagna

€7,273

12%

0.0%

11

London

Sloane Street

€6,402

-9%

16.7%

12

Milan

Corso Vittorio Emanuele

€5,819

0%

3.4%

13

Florence

Via Roma

€5,817

-9%

-9.1%

14

London

Covent Garden

€5,792

-30%

-5.0%

15

Cannes

La Croisette

€5,356

-6%

10.3%

16

Vienna

Kohlmarkt

€4,888

4%

0.0%

17

Florence

Via Strozzi

€4,849

0%

4.2%

18

Rome

Via del Corso

€4,847

-4%

0.0%

19

London

Oxford Street

€4,662

-21%

0.0%

20

London

Brompton Road

€4,573

-17%

3.4%

21

London

Regent Street

€4,304

-25%

-4.0%

22

Geneva

Rue de Rhone

€3,956

-3%

-2.5%

23

Munich

Kaufinger/Neuhauser

€3,724

-12%

0.0%

24

Vienna

Karntnerstrasse/Graben

€3,608

3%

0.0%

25

Munich

Maximilianstraße

€3,258

-10%

3.7%


Figure 2: Ranking of top retail locations in EMEA

 

Luxury goods go online

Luxury items are making a particularly strong showing online - precisely the goods that a few years ago were still vigorously clinging to the in person consultation model and only moved into the digital world after some delay. During the pandemic, demand for luxury items initially declined in line with other retail segments. Prominent brands used the time to improve their online offerings and deepen relationships with customers.

Since then, the luxury goods market has rebounded strongly and in some cases retailers are in a better position than prior to the pandemic. And significantly so: quarterly sales at major luxury conglomerates such as Hermes, LVMH and Richemont are up more than 20 percent since the end of 2019. Let's hope that the bricks-and-mortar areas of the retail sector will follow suit. Because without unique shops and vibrant see-and-be-seen high streets city centres are a sad sight.

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