Brexit a boon for travelling shoppers
LONDON — Would you travel halfway around the world for a handbag, or a coat? Maybe if you really loved it — and could get 20 per cent off.
At the moment, the price is right in Britain, where the decision to leave the European Union has led to a sharp drop in the pound. That’s proving a bonanza for luxury goods shoppers with foreign currency to spend.
Amy Chang, a 30-year-old from China, snagged a Burberry trench coat this week while visiting London for her sister’s graduation.
“I’ve had my eye on it for a long time and I’ve always thought it was too expensive,” she said, gazing through the Burberry window shops in New Bond Street, the heart of highend shopping in London. “But now, coming to Britain, it’s actually much cheaper than in China, so I finally bought it.”
The pound has lost value since the June 23 referendum on EU membership because of uncertainty about Britain’s economy. Just before the vote, the pound cost about $1.85 to $190 Cdn; it’s now around $1.60 to $1.65 Cdn.
Many foreign tourists are finding that their money buys more.
Julie Deane, founder of the Cambridge Satchel Co., said the bargains have had a “massive effect” on tourist spending.
“They come and check out the exchange rate and what it’s going to cost them and often that will mean that they go ahead and put a second bag in,” she told the BBC. “In some cases it’s been five bags and six bags.”
The U.K. is currently the cheapest place to buy luxury goods, with 64 per cent of products selling for less in Britain than in the U.S., China and France, according to a survey by the professional services firm Deloitte.
For example, the Louis Vuitton Speedy 30, a canvas handbag emblazoned with the iconic LV monogram, sells for the equivalent of $1,115 Cdn in the U.K. and $1,490 in China, Deloitte found.
And wanna be shoppers — particularly those from the Far East — are rushing to London before retailers adjust prices to offset the pound’s decline. Visit Britain, the national tourism agency, says flight-reservation data shows bookings from China to Britain are up 24 per cent for the last three months of the year compared with the same period in 2015.
Chinese visitors, many of whom are interested in the craftsmanship and authenticity of U.K. brands, like the boutique aspect of London shops but are also attracted to the new outlet areas such as Hackney Walk in London and Bicester Village in Oxfordshire.
“The luxury market is one of the most competitive — if not the most competitive in the world,” said Anusha Couttigane, an analyst at Kantar Retail. “The fact that the pound has seen such massive devaluation has made retail a far more attractive market for consumers who had been priced out of the market previously. It’s created a boon, a much needed boon, for British businesses.”