UK sees fastest-growing sales to non-EU tourists, Italy next
today Jul 24, 2019
The UK remains among the most popular shopping destinations for non-EU shoppers (who are able to claim back the VAT on their purchases when they leave) and its sales are rising faster than other European countries, new figures show.
That means a crucial boost for Britain’s fashion and luxury sectors with international shoppers now making up a massive percentage of sales in areas such as London’s West End and Knightsbridge areas.
Payments specialist Planet said the UK’s tax-free sales to international shoppers increased by 13% in June, making it Europe’s fastest-growing shopping destination for tourists. That’s despite the process for those shoppers to claim back their VAT refunds being more difficult in Britain than in many other European countries.
The UK was ahead of Italy, which was in a distant second place with only a 6% sales growth rate. Other major destination markets saw sales falls, such as Germany (-6%), France (-2%) and Spain (-6%).
The appeal of the UK to affluent travellers in particular can be seen from the fact that while data showed that the volume of tax-free shopping transactions rose 5%, the average spend value per transaction among international shoppers (ATV) rose by 8%.
Tax-free shopping is a popular pastime for international tourists in Europe generally and the industry is worth almost £7 billion a year in the UK alone, understandably also being a significant source of income for UK retailers.
Those retailers have enjoyed a strong 2019 so far, which contrasts with weak sales, for fashion especially, from British shoppers in their home country, but also with double-digit declines in tax-free sales to international shoppers for all but one month last year.
Planet said that last month, the UK was the favourite destination for Middle Eastern shoppers. That was even though they failed to make it into the top five source markets for any of the major mainland European destinations during June, when Eid al-Fitr took place. The Planet figures reflected similar numbers from rival Global Blue this week that also came with a predication of a continuing summer boom in Middle East luxury shopping in Britain.
Back with Planet, it said that June saw “a monumental” 116% rise in sales to shoppers from Kuwait and 83% to those visiting from the United Arab Emirates.
By contrast, this time last year saw sales to shoppers from Kuwait and the UAE plummeting by 21% and 17% respectively.
“The last time that UK retailers experienced a similar period of sustained sales growth to international shoppers was exactly two years ago, when a weaker pound following the Brexit vote resulted in a surge in tourist spend. Retailers will be pleased to know that we can now see that a recovery is well under way,” said David Perrotta, UK Country Manager at Planet.
While Europe has fallen behind the UK growth, sales growth across the continent did continue in June, albeit at a slower pace than in Britain, with ATV and volume of tax-free purchases both up by 2%. This was the ninth month of consecutive growth, helped by the strength of the US dollar, with American shoppers found to be the highest performing spenders across the region.
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