Tourist tax-free spending in the UK showed a slight uptick in December, offering a ray of hope amidst a challenging retail environment in the country. Despite a tough festive season, international tourists played a crucial role in boosting the average transaction value (ATV) by double digits for the month.
Data from tax-free payments specialist Planet revealed a noteworthy increase of up to 10% in ATV compared to the same period last year. Although the total tax-free sales to international shoppers only rose by 1%, this growth outpaced the stagnant retail sales reported by the British Retail Consortium during the holiday season.
The marginal increase in sales, coupled with the surge in ATV, hints at a potential decline in visitor numbers. This highlights the importance for the UK government to focus on attracting more tourists and streamlining the tax-free shopping process for them across the country. The UK’s digitalization of the VAT refund process at airports and ports remains lagging behind other European counterparts.
Despite the overall growth in tax-free sales from major markets, Chinese tourist spending experienced a dip in December. This trend was unexpected, especially amid challenges such as the Yellow Vest protests affecting popular shopping destinations like Paris. London, renowned for its shopping offerings, could have possibly benefitted from increased Chinese tourist expenditure.
Even though 2018 presented many obstacles, the latter half of the year witnessed a slower decline in tax-free sales with a modest December increase. This has left retailers optimistic for a successful 2019. ForwardKeys data indicates a rise in arrivals to the UK in the first quarter, particularly from Chinese and Japanese tourists, presenting a positive outlook for engaging with a crucial international market.
In conclusion, while the UK endured a challenging year in terms of tax-free spending, the slight improvement in December indicates a potential turnaround for the retail sector. Retailers are poised to leverage major global events in the first quarter to entice international shoppers and drive growth. Despite hurdles, there is a sense of optimism for a successful year ahead in the UK retail industry.
For more information on tax-free shopping in the UK, visit VisitBritain and Global Blue.
