International spend in the UK reached the highest level on record for December in 2014, according to retail tourism experts, Global Blue.
December 2014 broke the previous year‘s record, up a further 11% on the significant 40% year-on-year increase seen in 2013 for the month, but 2014 ended with international spend down 3% YOY overall as economic and political factors influenced top spending nations.
Despite the weak year, December growth shows how Christmas has become an increasingly important date in the globe shopper calendar, overriding the effects Black Friday discounts had on domestic spend.
Gordon Clark, UK Country Manager of Global Blue commented:
“2014 was a turning point for how Christmas is a key period for international spend, a trend which we expect to continue. Unlike domestic, globe shoppers are not simply drawn by the heavy discounts but also by the added benefit of shopping these discounted goods Tax Free in the UK, at a time when the streets are festively decorated to look their best. In what has been a slower year for international spend, it is encouraging for retailers to see strength over this period.”
Spend by shoppers from Hong Kong saw the highest growth in December, almost doubling, up 48% YOY, contributing to the 9% growth seen for 2014 as a whole, which built their position to be the 11th top shopper group in the UK as they follow the travel trend of their Chinese neighbours. Interestingly, Chinese spend rose 20% YOY in December, beating growth seen over Chinese New Year and Golden Week last year, previously thought as the biggest spend periods. China finished the year retaining its title as the number one shopper group representing 25% of total spend for 2014, but saw growth of just 6% YOY overall, significantly less than the double figure growth seen in 2013.
Middle Eastern nations also continued to see growth with Qatar and Kuwait leading for December, up 33% and 24% YOY but UAE trailing down -2% YOY for the month. Qatari shoppers have long been known for their soaring spend per transaction, now reaching £1,406 thanks to their taste for global powerhouse luxury brands, and Kuwaiti shoppers are now beginning to follow suit, with average transactions rising 18% YOY to £621. The strength of December‘s figures reflects their position for 2014 as a whole, with total Qatari spend up 16% YOY and Kuwaiti up 7% YOY but UAE, again, reporting a decline of -7% YOY.
Throughout a difficult year of political unrest for Thailand, Thai shoppers have overall been disinclined to spend in the UK, with sales down -24% YOY for 2014. However, figures show they couldn‘t resist the Christmas rush as spend soared 21% YOY for December.
The only shopper market not to have reaped the benefit of Christmas is Russia which dropped off the list of top 10 spending nations in December. The continual fall of the economy has left Russian tourists travelling abroad facing costs that, in rouble terms, have doubled in the course of the year, disinclining them to travel resulting in a -28% YOY decrease in spend for 2014 as a whole.
VisitBritain is predicting that international spend will pick up next year, with a total £22.2 billion expected to be spent, a rise of 4.5% YOY. However, businesses should be cautious that growth is slowing and it will not be the rapid rise as seen in the last five years.
Global Blue expect Chinese and Middle Eastern shoppers to continue their growth as more and more shoppers are drawn to the appeal of shopping in the UK thanks to Tax Free shopping services and the ability to avoid Chinese luxury taxes. The relaxation of visa rules for Chinese and introduction of new flight routes between UK and Asian cities is also facilitating visitors‘ journeys, which is encouraging for UK retail tourism from these nations.
Though Christmas has proved to be an increasin