LONDON — British retailers accustomed to doing a brisk business during Chinese Golden Week in October could be in for a shock next month due to the devalued yuan, according to new figures from Global Blue.
The retail tourism organization has warned that spending by Chinese shoppers declined 2 percent year-on-year in August, following the devaluation of the yuan in June. Overall growth in spending was up 8 percent in the seven months from January to July.
Global Blue said Golden Week, which runs from Thursday to Oct. 7, has long been a bumper season for U.K. retailers, “but as the effects of economic instability continue to take over the country,” British stores could be in for a shock.
Related Articles
“Global Blue is anticipating the Golden Week rush will be significantly weaker this year, and the decline could continue throughout the fourth quarter as Chinese are left disinclined to book trips abroad,” Global Blue said.
You May Also Like
The U.K. is also losing Chinese customers to Europe because of the weaker euro. Global Blue said the growth in Chinese shopper numbers in the U.K. slowed to 4 percent in the first half. By contrast, in the euro zone, it saw an increase of 74 percent in the same period.
In addition, Global Blue said U.K. retailers are not adjusting their prices to counter the exchange rate differentials or the ongoing visa issues for Chinese visitors. It is considerably harder for Chinese tourists to enter the U.K. than it is for them to travel to continental Europe.
Gordon Clark, head of commercial, U.K. and Ireland, said forecasts for Chinese spend in the U.K. are not encouraging.
He said the U.K. government should make the 10-year, multiple entry visa the standard visa issued to Chinese travelers. “By doing so we can increase visitor numbers by more than 250,000, adding over 335 million pounds [or $509 million at current exchange] per year to the U.K. economy,” he said.