International shoppers are choosing to spend money with British retailers over European neighbours this summer, according to Planet.
Tax free sales to international shoppers increased by 13% in June making the UK Europe’s best performing shopping destination for tourists with, Italy falling at a distant second place with only a 6% sales growth rate.
Other major destination markets such as Germany, France and Spain all experienced sales decreases. While the volume of Tax Free transactions in the UK increased by 5% and the average spend value per transaction among international shoppers rose by 8%.
International visitors to the UK and Europe often engage in Tax Free shopping – where VAT on retail purchases is refunded upon exit from the country visited. It’s an industry worth nearly £7 billion a year in the UK and a significant source of income for UK retailers.
The first half of 2019 marks a stark difference for UK retailers compared to this period last year which saw double-digit declines in Tax Free sales to international shoppers in all but one month.
The UK was also the firm favourite destination for Middle Eastern shoppers last month – a spike likely driven by the Islamic Eid al-Fitr celebrations. This resulted in a monumental 116% rise in sales to shoppers from Kuwait and 83% to those visiting from the United Arab Emirates among UK retailers. A striking contrast to last years’ figures, which saw sales to shoppers from Kuwait and the UAE plummet by 21% and 17% respectively.
David Perrotta, Planet’s UK Country manager, said: “We could be in for a big summer of spending, with major sporting events including the Cricket World Cup and Wimbledon taking place – cultural moments which draw in millions of visitors. Retailers need to ensure that they are doing everything they can to engage with their international customers and drive sales, capturing a share of their spend”.
RPA Perspective The UK emerged as a clear winner across all international spending categories last month according to Planet. Tax Free shopping transactions were up by 5%, while the average spend value per transaction among international shoppers (ATV) rose by 8%.
Sales to international shoppers have risen for the fifth month in a row.
“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 underway,” said Perrotta.
The Islamic Eid al-Fitr celebrations resulted in a monumental 116% rise in sales to shoppers from Kuwait and 83% to those visiting from the United Arab Emirates (UAE) among UK retailers. This is a striking contrast to last years’ figures, which saw sales to shoppers from Kuwait and the UAE plummet by 21% and 17% respectively.
Analysis reveals that the UK was the firm favourite for these shoppers this year, with those from Middle Eastern nations failing to make it into the top five source markets for any of the major European destinations during June, when Edit al-Fitr took place.
Sales growth across Europe continued in June, albeit at a slower pace, with ATV and volume of Tax Free purchases both rising by 2%. This healthy figure marks the ninth month of consecutive growth. Retailers benefitted from the strength of the US dollar, with American shoppers found to be the highest performing spenders across the continent.
