According to a recent report by Planet, luxury spending in Europe is experiencing a significant boost from both US and Indian shoppers. Despite concerns about a potential recession in the US, American tourists are increasingly investing in the European retail market, making them the fastest-growing international market in the second quarter of the year. This trend has persisted for the past year, with American visitors ranking among the top tax-free shoppers in the UK and Europe.
The latest Planet Shopper Index (PSI) underscores the substantial influence of American shoppers on the European retail landscape. By amalgamating retail sales and economic data, the report ranks the 25 most active international shopping nations in Europe. American shoppers have displayed the most significant increase in their spending score, trailing closely behind China in the rankings. This surge can be attributed to the strength of the dollar, which continues to outperform the euro and pound.
Luxury brands, particularly in the realms of fashion and beauty, are reaping the benefits of heightened spending by American tourists. Tax-free retail sales to US shoppers have consistently risen by double digits over the past 14 months, with a 15% year-on-year surge recorded in July alone. Despite the economic uncertainties looming over the US and the ongoing trade tensions with China, American expenditure in Europe remains steady.
In addition to American shoppers, emerging economies in the Asia-Pacific region are contributing to the diversification of the European retail market. Consumers hailing from India, the Philippines, Thailand, and Indonesia are making substantial contributions to the escalating expenditure in Europe. While China continues to lead in terms of spending, there has been a noticeable deceleration, alongside a dip in expenditure from Russian tourists. The upsurge in spending by American and APAC shoppers has bolstered the overall median score in the recent PSI rankings.
India, in particular, has showcased remarkable growth in spending, with an index score increase of 8 in the latest report. The staging of the ICC Cricket World Cup in the UK during 2019 drew an additional 80,000 Indian nationals to the country, resulting in an 18% swell in tax-free sales in June. Indian shoppers display a predilection for luxury brands, with this category comprising a substantial 42% of their expenditure in the UK, surpassing Chinese and Gulf Co-Operation Council (GCC) shoppers.
Overall, the influx of US and Indian shoppers has yielded positive outcomes for the European retail market, with luxury brands witnessing increased sales and sustained growth. Against the backdrop of global economic uncertainties, the spending patterns of international tourists assume a critical role in buttressing the retail sector in Europe.
For further reading on this topic, check out the following links:
1. Luxury Goods Market in Europe – Statista
2. Americans are the world’s top shoppers – MarketWatch
