We could have been in a shopping mall anywhere in the world. In fact, standing among the throng of shoppers — camera-carrying tourists, families with strollers or toddlers in Kiddy Cars and gaggles of teenagers — it would have been easy to believe that we were in Takashimaya or Suria KLCC on a busy Sunday afternoon.

Except that this was in the East End of London in Westfield Stratford City, the spanking new shopping centre situated next to the Olympic Park. This retail behemoth is touted to be Europe’s largest urban shopping centre, with 1.9 million sq ft housing over 300 shops, 70 restaurants, a 14-screen cinema, three hotels, a 14-lane bowling alley and the UK’s largest casino.

Along with the Olympic Park development, Westfield Stratford City is part of London’s ambitious regeneration plans for its East End, one of the city’s most deprived areas. There are great expectations that the £1.45 billion (RM7.12 billion) project will inject much-needed growth into the local economy, and already, its retail and leisure outlets are believed to have created 10,000 permanent jobs upon its opening, with 2,000 aimed at the local long-term unemployed.

So far, Westfield Stratford City has taken off with a promising start. Despite the current economic gloom and reduced consumer spending, a crowd of 160,000 turned up for its opening on Sept 13, astounding retail tenants who had been expecting 60% less people. Media reports described how hundreds of shoppers queued up at the entrance, some as early as the night before, and rushed through the doors when they opened at 8am, even though the shops did not officially open until 10am.

The huge response was no doubt due to the opening deals and freebies offered by many of the retailers, including £50 Forever 21 vouchers and goodie bags and Uniqlo merino wool sweaters for £14.90. Even so, on our visit nearly three weeks after the opening, Westfield Stratford City was still crowded with shoppers and families who could have been outdoors enjoying an unseasonably warm October day.

Upon closer look, however, it was clear that a huge crowd didn’t necessarily equate to big spending; on average, only one in 10 shoppers carried a shopping bag. And while the ground floor boasts a number of restaurants that stay open beyond the main shopping centre’s closing time, most of them were only half full on a Sunday evening.

Westfield Stratford City’s mid-September opening couldn’t have been more ill-timed. The first eight months of 2011 have been particularly tough for retailers. Growing inflation — the consumer price index hit 4.5% in August — combined with weak wage growth and government spending cuts have seen the average UK family’s weekly disposable income drop by 7.9% (to £162) compared with this time last year, supermarket chain Asda’s monthly Income Tracker reports. Further belt-tightening is expected, amid growing concerns about a double dip recession given the state of the global economy and the eurozone debt crisis.

Even supermarkets, usually considered to be fairly recession-proof, are struggling. Tesco, which is said to hold nearly 30% of the UK grocery market, revealed last week that it has seen its worst six months in the country since the recession of the early 1990s. In 1H11, the retail giant experienced a 0.5% drop in like-for-like sales in the UK, its first such decline since 1990.

Peter Marks, CEO of supermarket chain the Co-operative Group, has described 1H11 as the toughest six months he’s seen in 40 years. For the first time, cash-strapped consumers are spending less on food, forcing most supermarkets to cut prices in order to shift stock, Marks told the Daily Telegraph in late August.

The outlook, is equally bleak, with some retailers anticipating the worst Christmas season in decades. This is of course assuming that they have successfully met the Sept 29 deadline for the advance payment of 4Q’s rent to their landlords. Industry watchers are expecting more High Street failures in 4Q11 as retailers fail to pay their rent, suppliers and creditors, Reuters reports. They will join this year’s casualties, which so far include wine retailer Oddbins and iconic home furnishing firm Habitat.

High Street retail vacancy rates currently stand at 14.5% nationwide, three times more than in 2008 at the onset of the recession, data from retail location research firm Local Data Company shows. Aside from the economic climate, the steady decline of the High Street has also been attributed to consumers flocking to out-of-town shopping centres, as part of a global trend towards what’s been described as “destination” malls with shopping, dining and leisure offerings under one roof.

This bodes well for Westfield Stratford City’s long-term growth. As the gateway to London’s Olympic Park, it will have a “captive” market next summer; 70% of the 2012 Olympic Games visitors will have to walk through this tempting temple of consumerism to get to the sporting events. To ensure its survival beyond 2012, however, it will need to attract and retain the potential catchment of 4.1 million British shoppers it had estimated at the start of the project.

Lim Yin Foong was editor of Personal Money, the personal finance magazine published by The Edge Communications, from 2001 to 2006. She is currently a freelance editor based in the UK.