Tourist spend in UK shops hits five year low
New figures have revealed that tax free spend by overseas shoppers coming to the UK has fallen for the first time since the aftermath of the global financial crisis in 2009.
According to data from Global Blue, tax free spend by international visitors to the UK fell by 4% year-on-year in the period January to July 2014.
Political unrest and weakening currencies in some of the typically top spending shopper nations have been pinpointed as the key influencers on the fall. Global Blue, which operates tax free services in 43 countries, has reported a drop in spend across all leading retail tourism destinations for the second quarter of 2014, with a fall of 3% year-on-year overall.
Gordon Clark, UK country manager of Global Blue, said: “Our figures show that political unrest and weakened home currencies are leaving shoppers from our top spending nations in a position where they are still spending more per transaction (+1% year-on-year overall for the UK) than before but are making less purchases than they would have made in the past, resulting in the UK seeing a -4% year-on-year reduction in the sales in store from tax free shopping.
“More than ever now British retailers and hotels need to review their international marketing plans, product range and staff training to ensure they still continue to secure this crucial international spend.”
Global Blue found that the two top markets, China and Middle Eastern nations, have continued to lead spend in the UK but growth has slowed.
Clark said: “Chinese spend is up 8% year-on-year so far this year, much less than the 20-50% growth we have seen in the past few years. However, as economies begin to recover, we expect to see growth from key nations pick up again.”
Meanwhile the weakening economy in Russia, which has been exacerbated by the Ukraine crisis, means that Russian shoppers visiting the UK have been left disadvantaged against sterling due to a drop in the value of the rouble. This has resulted in a 20% decline in spend according to Global Blue.
Last year the company identified Thailand as one of the key nations to watch as it reported that total spend by Thai shoppers was 46% up year-on-year at the end of 2013. However, its figures now show that Thai spend is 27% down in the year to date, mainly due to a depreciation of the country’s currency.
