Tourists "propped up" UK and Europe luxury retail spend in July - report
British and European shoppers may not be in the mood for lavish spending at the moment, but the retail sector is being “propped up” by spending on the part of international tourists. And luxury fashion is a key beneficiary of this.
That’s according to data from international payments company Planet, which facilitates VAT refunds for non-EU visitors to the region. It said that its latest data has shown UK businesses enjoying a 9% increase in sales to tourists last month. That increase was helped by the fact that international shoppers spend around 3.7 times that of their domestic counterparts in Europe generally and makes them “an invaluable customer base for retailers.”
And it's a customer base that will only get bigger with Planet also saying "their appetite for luxury goods coupled with a growing propensity for international travel suggests that this opportunity will grow in the coming years.”
As mentioned, international shoppers spend a lot more per transaction than domestic shoppers do and they're particularly important for the luxury sector as much of their spend is focused on this area.
“Shoppers from around the world provide much-needed revenue for a domestic retail sector that is working its way through a rapid transformation and trying to combat the alluring convenience of online shopping. International shoppers offer certainty at a time when the domestic retail market is lacking it,” said David Perrotta, UK Country Manager at Planet.
But the UK wasn't the only country to benefit from July’s rising spend. While international visitor spend in Britain rose 9%, across Europe it was up 10% as tourists travelling for the summer holidays spent heavily.
Spain and Italy were particularly popular with international visitors, witnessing sales growth of 24% and 17% respectively year-on-year.
Across both Europe and the UK, the buoyant economies of China, Russia and the US meant that consumers from these countries were prominent among the international shoppers last month. But July also saw more evidence that the global consumer base is diversifying, with sales to shoppers from South Korea surging 20%, more than any other visitor nation.
For the UK, India alone saw an 18% sales increase during July, the highest monthly growth figure recorded by that country’s shoppers this year. Planet added that the ICC Cricket World Cup drove spending from this rapidly growing source market, as shoppers from India flocked to the UK to celebrate their national sport.
This growth in shoppers from countries that haven't been top of the spending league previously is an indication that retailers need to be acutely aware of changing trends in visitors.
“Retailers need to keep an eye on the horizon by recognising who their emerging audiences are. International markets are home to rapidly expanding middle classes who are poised to spend internationally – with Europe being a favourite shopping destination,” Perrotta added. “While a growing global client base is great news, retailers need to ensure they are equipped to understand the nuances of an increasingly varied consumer base.”
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