The depreciation of the pound hit many retailers where it hurts in terms of sourcing costs – but there’s an upside in the form of bargain hungry tourists.
UK retailers are set to rake in as much as £2.4bn this summer on foreign cards driven by Middle Eastern, Russian and US tourists looking to stretch their holiday fund a little further.
According to payments processor Worldpay, luxury boutiques and department stores were the biggest beneficiaries during the Islamic festival of Eid last month, but the trend is set to continue for the rest of the season in a “summer spending frenzy.”
Whilst in more stable times catering to the whims of the tourist shoppers may have seemed foolhardy, it seems likely that the pound’s value will remain downtrodden for the foreseeable future.
Travellers cashing in on a weak pound certainly seems more predictable than the weather, retail’s favourite scapegoat – so now could be a good time for the sector to think about how to best monopolise on the trend.
Also today Superdrug stablemate The Perfume Shop posted a drop in its full-year profits and John Lewis unveiled plans to trial co-working office spaces in some of its older stores.
Today in numbers
The increase in AO.com’s UK revenue in its first quarter
The Perfume Shop’s full-year operating profit, down 11%
Look out for McColl’s interim results and the first instalment Retail Week’s Christmas in July series, where we look at expected bestsellers this festive season.
Grace Bowden, reporter