UK luxury gets pre-Ramadan boost, US and China spend also surges

By

Sandra Halliday

Published
May 22, 2017

The pre-Ramadan rush is continuing for UK retail as the weak pound and the allure of the luxury offer available in key cities such as London continues, according to new figures from tax-free shopping specialist Global Blue.

Tourists from other regions are also adding to the international visitor boom as the pound stays weak against a basket of currencies.

The company said Middle East tourist spent in the UK rose 8% in April and is up 12% for the year-to-date. Meanwhile tourist spend overall rose 38% in April year-on-year and Chinese shopper numbers surged by 81%.

The rise in shoppers from countries such as the UAE, Qatar, Saudi Arabia and Kuwait comes as travellers typically enjoy a luxury holiday ahead of their religious commitments for Ramadan, which takes place from May 26 to Jun 24 this year.

But while the Middle Eastern spending rise is smaller than that of some other countries, it’s particularly significant given  that those countries collectively account for the largest share of the international tax-free spend market in Britain for 2017 at 37%, ahead of China’s 20%.

It’s also significant given the overall slowdown is certain Middle Eastern economies. As oil prices stay low, a raft of luxury firms have reported slower business in the region in the past year. But it’s clear that its shoppers are still prepared to travel and to spend heavily while doing so.

Global Blue’s UK and Ireland MD Gordon Clark said: “Middle Eastern visitors have continued to make travel decisions to the UK in the face of low oil prices and, consequently, reduced economic growth forecasts. The favourable exchange rates have, without doubt, encouraged visitors’ UK purchasing behaviour.”

The company said Middle Eastern shoppers spent £1,101 on average per transaction in April with Qataris spending the most at £1,744 per transaction.

But what about those other countries spending heavily in Britain? With total tax-free spend up 38% during April, as mentioned, the country saw its 10th straight month of growth.

That was largely due to increased activity from China, yet while China’s 81% surge beat all others, the US was strong too with a 56% increase in spending on the part of its visitors. Meanwhile travellers to Britain from Hong Kong spent 50% more. And although Taiwan and Indonesia account for a small percentage of the overall tourist spend (2% and 1% respectively), they saw growth of 179% and 100% last month.

The data suggests the figures for May are also likely to be buoyant. But while June spending is likely to be slower due to Ramadan, Global Blue is expecting a high volume of spend during July as the religious holiday ends a few weeks earlier than it did last year.