The latest edition of the Planet Shopper Index (PSI) – a quarterly rundown of the top 25 most lucrative source markets for European retailers – reveals that international shopper activity across Europe accelerated in the second quarter of the year, mainly driven by US shopper activity and a bounce-back of visiting nations’ currencies against the pound and euro.
In fact, a strengthened dollar has led European retailers to ensure growing sales to American shoppers. On the other hand, a slowdown in emerging market shopper activity can be noted in Europe, especially from Chinese shoppers, driven in part by the resulting effects of ongoing trade disputes and the consequences of currency volatility.
According to the report, the increase in overall shopper activity was led by developed market visitors – a sharp contrast to last quarter’s data, which saw emerging market nations outperform all other groupings. “At a time when warnings of an impending US recession are appearing in many financial and business media, US citizens are continuing to reap the benefits of the buoyant domestic economy that has seen Europe’s retailers enjoy a windfall in sales to shoppers from across the Atlantic,” PSI stated.
However, China, the international shopping heavyweight, still sits at the top of PSI’s ranking of the 25 top-performing visiting markets to Europe’s retailers (top 1), closely followed by the US (top 2). The positions immediately below these are occupied by an increasingly diverse group of nations and metropoles with an growing amount of well-performing shoppers, including Hong Kong (top 3), UAE (top 8), Indonesia (top 9), Singapore (top 11), the Philippines (top 13), and India (top 17) that are providing Europe’s retailers with new retail growth opportunities. As for Russia (top 4), the nation’s performance in the last quarter has seen it emerge as the worst-performing market in the latest index. Three years of sanctions, low oil prices, and consequent austerity measures have taken their toll on the usually prolific international luxury shoppers.
Overall, the average international shopper in Europe spends almost four times as much as their local counterparts – international spending accounts for up to 60% of total sales for some major retailers. “The retail sector is evolving and becoming a market that, for some brands, derives almost as much value and revenue from international visitors as it does domestic,” concluded the report. “This is reason for celebration, as the persistent economic development and growth in spending power of emerging markets sees them repeatedly knocking at the door of the more traditional luxury spenders in our league table.”