UK tax-free sales to American tourists climb higher

By

Barbara Santamaria

Published
Nov 12, 2018

American shoppers might be the answer to the UK high street crisis as new data shows that tax-free sales to US shoppers grew 14% in September.

The strong dollar and increased consumer confidence in the US economy are driving US tourists to spend more in the UK, according a data from international payment company Planet.

September saw UK sales to American tourists grow at the highest rate in 15 months.

The results come on the back of recent statistics demonstrating a robust US economy, with the unemployment rate reaching its lowest level in nearly 50 years in September. Additionally, the dollar has bounced back from a low of $1.43 to the pound in April to a high of $1.28 in September, growing by 11.5% over five months.

US tourists in the UK spent more than £3.6 billion in Britain in the UK last year, more than double the next highest visitor nation, according to VisitBritain. And with tax-free sales to US shoppers growing, fashion and luxury brands stand to benefit the most, showed a separate report from Brand Finance.

“While the spend per person among American tourists may not be as high as some other nations, the sheer volume of US tourists shows that UK retailers should do all they can to capture a share of this vital spend,” said David Perrotta, UK country manager at Planet.

“Clearly, US consumers are feeling more comfortable travelling abroad and spending, and the recent strength of the dollar will no doubt have been a contributing factor.”

CHINA'S INFLUENCE CRUMBLES

While US shoppers registered higher sales increases than any other major source market for UK retailers in September, shoppers from the United Arab Emirates continue to be biggest spenders, spending on average €604 per transaction.

And although Chinese tourists still command the largest share of the UK tax free market, sales to shoppers from this country declined by 10% in September. Perhaps more tellingly, tax-free sales to Chinese tourists fell by almost 15% in the UK during Golden Week, one of China’s largest national holidays which traditionally brings a spike in sales in western European countries.

Overall in Europe, tax-free sales to Chinese shoppers grew by 5.8% during the same week, with France enjoying the highest growth (13.6%).