Why Prime Remains Prime

WHY DO ALL THE best shops tend to be in more or less the same place? Even more curiously, why are retailers prepared to pay what might look like astronomical amounts to trade from locations where the operating costs will almost certainly outstrip any revenues and profits that are likely to result?

The answer to all of this is prime. Some places are simply better than others at attracting shoppers and prices – and consumer statistics reflect this. So great is the black hole-like pull of choice locations that many retailers will pay the price to possess a store in an area – at which point it’s marketing, not retailing.

Currently, this is the case on London’s Oxford Street. This is top-tier territory and the prices certainly indicate such, yet for a while it seemed that many new tenants were short lease, like American candy brands (such as Reese’s) and nail bars, while several big-name department stores had said their final farewells to shoppers.

Now the street is back and punching. The candy shops are disappearing and Niketown, a true behemoth, is set for a revamp to open in 2027 and in the meantime, taking a three-floor temporary space in the former Microsoft emporium across the crossroads at Oxford Circus. IKEA City, a 62,430-square-foot, two-floor affair, next door to the soon-to-be renovated Niketown, has recently opened, while the likes of New Balance and Pull & Bear have reopened following a refurb and a relocation. Later this year, Puma will open a European flagship on Oxford Street.

All of which looks a little like a renaissance for a thoroughfare which has frequently been dubbed Europe’s busiest shopping street. Prime is once more prime and a price is being paid while strip malls and time-served malls in secondary locations may be feeling the pinch across the U.K.. The same is true of Paris’ Champs Elysées and the Mitte district in Berlin. It’s all about aspiration, retailers’ and shoppers’, and it does provide a little relief visiting any of these. There is still a lot of life in physical retail – in select locations.