The UK was the destination of choice for Gulf Cooperation Council (GCC) shoppers in August, with three of the five top-spending visiting markets being GCC nations.
Shoppers from Kuwait, Saudi Arabia and the United Arab Emirates (UAE) all spent more in August compared with the same period last year. Kuwait led the pack with a 17% rise in sales.
Eid al-Adha, a major event in the Islamic calendar, took place from August 11 to August 15, likely driving this rise in spending. The UK was the only major European destination market to see three GCC nations rank among their top five source markets.
The figures come from international payments company Planet, who facilitate VAT refunds for international shoppers – a measure widely seen as an accurate indicator for the purchasing power of different markets’ tourists and the retail attractiveness of the countries they visit.
UK retailers continued to enjoy the effects of the summer spending season with overall Tax Free sales to international shoppers rising by 5% year-on-year in August. While the rate of growth is subdued compared with the previous two months, which came in at 13% in June and 9% in July, the figures suggest healthy international shopper activity in the UK, providing retailers with a much-needed boost amid the slowing UK economy.
International shoppers spend an average of 3.7 times that of domestic customers, with sales to these visitors accounting for up to 60% of sales for some bricks and mortar retailers.
While sales and average transation value (ATV) were up in the UK, registering growth of 5% and 9% respectively, the number of transactions was down by 3%. This was likely driven by GCC shoppers who typically spend more on fewer bigger ticket items – making European luxury brands particularly popular. GCC nations are widely known for being resource rich, which has allowed these countries to become some of the world's fastest-growing economies, fueling high volumes of outbound tourism and international shopping.
RPA Perspective The US, whose shoppers have been on a 14-month spell of retail sales growth in Europe, also made gains as Tax Free sales rose by 16% - making it the UK’s second-largest growing source market this month. The growth comes at a time when sales to shoppers from China declined by 5% compared with the same month last year.
“An increasingly diverse customer base is great news for UK retailers – particularly when domestic retail spending is unpredictable.The fact that we are still seeing overall sales increases in the UK and Europe when two of the biggest traditional spenders – China and Russia – are seeing a slowdown in sales, is testament to this.
“To capitalise on this trend, retailers need to be ready for international shoppers. Understanding cultural nuances and being equipped to take payment via emerging digital platforms will ensure that the UK remains open to global audiences, who are fast becoming a major source of revenue for retailers,” said David Perrotta, UK country manager at Planet.
