International shopper activity slows in Q1
Written by Peter Walker
International shopper activity across Europe’s retail destinations fell slightly in the first quarter of the year compared with the previous quarter, as a short burst of gains for the British pound weakened the purchasing power of more than half of Europe’s top 25 non-EU visitor nations.
The median score of the latest Planet Shopper Index - which combines retail sales and economic indicators to illustrate the strength of international shopper activity in Europe - fell from 97 in the final quarter of 2018 to 95 in the first quarter of this year.
As one of Europe’s premier retail destinations, currency fluctuations in the UK often affect international shoppers’ willingness to spend, and can often be impactful enough to reduce arrivals.
The reverse was true two years ago when the UK experienced a post-referendum boom in international shopper spend following the post-Brexit-vote depreciation of the pound.
Data from the first quarter saw global luxury shopping powerhouse China retain its position at the top of the table – but the gap between it and other nations narrowed.
Traditionally one of Europe’s most prolific luxury shopping nations, Russia’s international spending power rose in the last quarter after a torrid 2018, thanks to inflation falling from a fourth quarter 2018 average of 3.9 per cent to 2.6 per cent and a strengthening of the ruble against the euro by more than triple the rate of the previous quarter.
With a greater volume of expendable income, Russian shoppers in Europe spent an average of €526 per purchase in the first quarter – up from €519 the previous quarter. Overall sales volumes also saw a significant increase, leapfrogging the US into second place behind China by this measure.
Saudi Arabia meanwhile dropped from 9th to 12th place in the league table, partly due to a 1.2 per cent fall in the nation’s GDP during the first quarter – the second biggest fall out of the 25 countries included in the index. This contraction came as the IMF projected that the country’s budget deficit will hit seven per cent of GDP by the end of the year: indicating that economic growth is not keeping up with spending, likely trickling down to consumers and resulting in a lower willingness to travel and spend abroad.
David Perrotta, UK country manager at Planet said: “Despite a slowdown in Q1, our latest monthly Planet Intelligence data point to strong gains for the European retail sector in Q2 – with tax-free sales experiencing double-digit growth.
“Our data revealed that Europe-wide sales to international shoppers grew by 11 per cent in April compared with the previous year – the highest figure in 22 months,” he continued, adding that the situation in the UK was even more positive, with April growth of 15 per cent.