International shopper confidence is restored across Europe a year on from terror-related sales slump

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Retail sales to international shoppers in Europe grew by a healthy 11% in April following a torrid period a year earlier. The latest sales figures mark a 19-percentage-point improvement on April 2018’s 8% sales dip – a period that followed a string of terror attacks across the continent which deterred many international shoppers from visiting major European shopping destinations.

The drop-off in sales a year ago followed events such as the Manchester bombing, the Barcelona car attack, stabbings in Carcassonne and the Paris floods. However, the frequency of attacks and disruptive events in the last 12 months has fallen dramatically, coinciding with double-digit sales increases in many major European destinations.

The figures come from international payments company Planet, who facilitate VAT refunds for international shoppers – an indicator widely seen as an accurate proxy for the purchasing power of different nations’ tourists and the retail attractiveness of the countries they visit.

UK retailers welcomed a 15% increase in sales to international shoppers in April, marking three months of consecutive sales growth and the highest UK growth figure in just under two years.

This recovery comes almost two years on from the Manchester Arena bombings and the London Bridge and Finsbury Park attacks, which contributed to an extended period of decreased international shopper spending in the UK, hitting a low of -23% in April 2018.

The biggest spenders in the UK in April were Chinese, Kuwaiti and US shoppers, who accounted for a 17%, 8% and 7% share of total sales to international shoppers, respectively. The biggest spenders per transaction were those from the United Arab Emirates, who spent an average of €534.

David Perrotta, UK country manager at Planet, explains: “Sales to international shoppers are an excellent tell-tale figure that can indicate the economic and political state of a country. Over the past few years, Europe has been stricken by a series of terrorist attacks and geo-political events, and the retail market has clearly suffered as a result. It’s positive to see that international shopper confidence in the UK and Europe is being restored. These sustained months of growth are a positive sign for retailers, and the year ahead.”

Since the beginning of 2019, UK retailers have recorded Tax Free sales increases for three of the last four months, suggesting that a sustained recovery is set to continue for the year ahead. This is further exemplified by the fact that the average transaction value is up by 13% in April and has averaged at 8% growth between January and March.

Despite recording a 6% sales increase in April, France was the lowest performing of Europe’s five biggest international shopper markets. Its growth figure represents a nine-percentage-point difference compared with the UK and Germany, and is likely due to the ongoing Gilets Jaunes protests.