Jonathan De Mello, Head of Retail Consultancy, CBRE, comments on the impact on the UK retail sector of London 2012: “The London 2012 Olympic Games will provide a very welcome boost for the embattled retail sector at a time when it needs it most, given the administrations of Peacocks, Clinton Cards and Game this year, and hundreds of store closures and jobs lost in retail throughout the country.
“The ‘legacy effect’ of the Olympics through increased tourism and foreign direct investment is a proven phenomenon and given the staging of the Olympics in the east end of London – which has seen huge investment in the past few years – the legacy effect could be the most profound since the Games were staged in Barcelona in 1992. The Olympic Games could deliver between £750m-£1bn worth of additional consumer expenditure to the UK this summer, with a longer term legacy effect on spend of up to £5bn over the next five years.
“The government appears to have recognised the opportunity that the Olympic Games will afford to retailers, through a suspension of Sunday trading laws over the eight week period. This will allow retailers to benefit as much as possible from the substantial additional footfall and spend that tourists and visitors will bring.
“While the whole of the UK will benefit from both a short term and longer term increase in economic output during the Olympic Games, it is clear that London will be the principal beneficiary of this. Given retail in London has proved to be remarkably resilient to the current economic downturn – and has recently benefited from substantial new development in the form of Westfield Stratford – it will be interesting to see how far the ‘legacy effect’ will extend to retailers trading in towns like Burnley, Bootle or Berwick.”