International shoppers still boosting UK retail - Planet
today Nov 30, 2018
With UK retail under pressure due to Brexit, international shoppers continue to be a bright spot and they’re bringing “a much-needed boost to the sector during the crucial winter trading period,” according to international payments provider Planet.
Average international spend and tourist numbers are rising with more growth expected in the months ahead. And consumer confidence in the US is directly benefiting UK retailers as tax-free sales to American tourists are continuing to grow. That's highly important to the fashion sector with fashion and luxury goods a key purchase for tourists.
After the post-Brexit vote fall in the pound in mid-2016 had seen a rush of international visitors, Planet said that tax-free sales have been declining in the UK, although they remain higher than the pre-vote level.
October saw a two-percentage-point improvement compared to September and the average transaction value (ATV) of purchases made by tourists increased by 6% year-on-year, “confirming that the UK remains a lucrative destination for international travellers ahead of the holiday period,” Planet said.
David Perrotta, the company’s UK Country Manager, said: “While sales growth might be down as UK consumers keep a tight rein on spending, international shoppers offer much-needed solace for retailers. Our data shows that tourists in Europe spend on average 3.7 times more than their domestic counterparts, and that both individual and combined tax-free sales in the UK are on the rise. This presents an unmissable opportunity for retailers looking to maximise profits in the crucial end-of-year sales rush.”
And Britain is expected to continue to benefit from an influx in tourists in the coming months, with arrivals forecast data from Forward Keys pointing to a 2.5% year-on-year rise in tourist arrivals from this month to January.
The UK is set to be particularly popular with travellers from Asia as arrivals from Japan and Taiwan are expected to post double-digit gains – registering growth of 19.4% and 11.4% respectively.
The US is also key, having risen up the international league table to become the UK’s second largest tourist source market, accounting for 8% of all tax-free spending. Sales to American tourists in the UK rose by 11% year-on-year last month.
Perrota added: “UK retailers have reason to be optimistic. But in order to fully capitalise on the opportunity, it is imperative that they understand the cultural nuances of their increasingly international customer base. Many are already aware of the importance of this – one of our clients recently undertook a specialist cultural training course that resulted in ATV and sales rising significantly.”
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