Many retailers in the UK have been left disappointed by the Christmas trading period, with chains such as Tesco, Morrisons and Debenhams forced to readjust their annual profits forecast due to a somewhat lacklustre December.
However, in key tourism areas such as London and Edinburgh, retailers benefited from a boom in tourist spending which almost made up for the disinterest shown by domestic consumers.
The amount spent by tourists on tax-free goods during December rose at a record pace, growing by 40 per cent in the month according to the tourism shopping monitor by Global Blue. This was the highest growth on record for the month, demonstrating the increasingly powerful part tourism is now playing in the UK retail industry’s recovery.
Chinese visitors were the primary driving force for growth, with spending in this category increasing by 52 per cent – this means that around £1 in every £4 spent in UK shops by tourists was by a Chinese national. Russian tourists followed hot on their heels, lifting sales by 30 per cent.
Tourists from the Middle East, Thailand and Singapore also stepped up to the plate in terms of spending, with luxury items proving particularly popular. This is partly due to the fact that European luxury items cost much less in the UK than in Asia thanks to more favourable tax laws on imported goods.
UK country manager for Global Blue, Gordon Clark, believes that retailers are managing to capitalise on a growing trend for retail tourism, especially in key retail destinations such as Bond Street.
He says; “Retailers are recognising the international shopper as increasingly important, even at key times for domestic spend such as Christmas.
“Pre-travel marketing, cultural training and multilingual staff in store are all increasing the appeal to global shoppers and have led to record breaking sales growth.”
Unfortunately, not even an unprecedented leap in international shopper spending was enough to distract retailers from the tough trading conditions this December. According to data from the British Retail Consortium (BRC) and Springboard, overall footfall in the UK fell by 2.4 per cent last month, with the high street worst affected by a 3.7 per cent plunge.
This brought the quarterly footfall decline to 3.8 per cent – the worst drop since August 2012 when judged upon a three month basis.
BRC Director General, Helen Dickinson, believes that once again internet shopping was the major cause for the tough conditions under which retailers had to operate.
She says; “These figures highlight how the rapid evolution of multichannel is changing the face of shopping, particularly at Christmas.
“Rather than making multiple trips to the shops over the festive period, many of us planned ahead for our gift buying and took advantage of retailers’ investment in services like click and collect so that they could cover off their festive spending at their convenience.”
With technological advancements unlikely to slow any time soon, perhaps the UK retail industry may soon be more heavily reliant upon international shoppers than ever in the battle to boost the high street.
