The UK retail industry continues to be impacted by restrictions on visas for Chinese visitors, according to tax redemption specialist Planet.
The company said that London continues to trail rival Paris by a ratio of three to one for Chinese visitors and said that even the Gilets Jaunes protests in the French capital have failed to put shoppers off the French capital.
Patrick Waldron, CEO of Planet, put the difference down to both the visa issues and a historical political decision to consider all immigration the same and therefore restrict visitors as well as potential settlers, plus the paper-based system for claiming tax refunds.
He compared it with the UAE, where a digital system takes between 25 seconds and two minutes, with the long queues that often form at UK airports.
In addition, some 40% of payments made in French stores by Chinese visitors go through Alipay, a far higher penetration that in the UK.
These challenges come at a time when the West End is facing a tough domestic market.
“April and May have been very sluggish across the West End, although luxury has continued to perform strongly,” reflected Henry Gregg, director of external affairs at New West End Company. “The squeezed middle has inevitable affected Oxford Street, which has experienced a bit of a mixed bag, more than Regent Street which has held up reasonably well. But the opening of Microsoft and Market Halls [at the former BHs site] should bring a new dynamic.”
RPA Perspective At a morning briefing Planet’s figures for tourist spend reveal that in a challenging market the UK is also scoring a number of own goals, notably with visa restrictions and an arcane tax refunds system.
In addition, it pointed out that an increasing volume of Indian visitors are experiencing poor customer services within retail stores, with many staff assuming they are domestic shoppers and not high net worth tourists.
NWEC said that it was working with retailers to share sales data to further assess performance and also that it is replacing one of its key footfall cameras with a far more sophisticated system in September, which allow analysis of where visitors are from, their demographics and gender, assuring far more detailed analysis of shopper visits.
Planet added that cultural training can lead to large sales increases, by up to 35% it estimated. It pointed to Bicester Village, which has spent the past six months working with Indian tour partners to better understand the market and the profile of visitors to ensure stronger sales performance from Indian shoppers.
“Chinese shoppers tend to be led by female visitors aged between 18 and 35,” said Waldron, “so they are buying for the whole family. However, Indian shoppers tend to be a little older, so a different approach is required.”
Overall, visitor numbers in to the main Western European countries are up by single digits in the year to date, other than France which has seen a 2% downturn largely because of the disruption caused by the Gilets Jaunes in Paris.
Of the top five source markets, Chinese, American and Taiwanese arrivals are all up on the year, while Russia and South Korea are slightly down. However, US visitors outnumber Chinese by around 10-to-one. Many do not know that they can reclaim tax, making this a vast untapped market said Planet. However, it warned that US tourists are far less likely to stand in line for long to reclaim the tax at the airport.
