UK stores miss out on Ramadan rush in 2018 - study

By

Sandra Halliday

Published
Aug 22, 2018

It could be the pound’s slight recovery making UK prices less attractive, or issues specific to the Middle East, but it seems that visitors from majority-Muslim nations have mostly overlooked the UK for their shopping trips this year.

A report from international payments specialist Planet said that what typically represents a cash windfall for UK luxury retailers, has been something of a damp squib in 2018. Tax-free sales revenue in the week following Ramadan and Eid al-Fitr in June saw a 20% decline compared with the same post-Ramadan period last year.

The figures cover tax-free sales in the UK by shoppers from Gulf Co-operation Council (GCC) countries. These include Saudi Arabia, Qatar, the UAE and Kuwait, and Southeast Asian countries such as India, Indonesia and Pakistan.

The annual ‘Ramadan Rush’ is typically a major boost to UK retailers, as shoppers from these nations often take holidays in the week following Eid al-Fitr and plan to make large savings on luxury goods through tax-free shopping. But Planet said the disappointing sales data was in line with the overall trend for the UK in June, with an 11% year-on-year fall in total tax-free sales turnover.

And that’s a big problem given the amount GCC shoppers spend. While in the first six months of the year, heavily-populated China accounted for 24% of all tax-free sales in the UK, Kuwait and the UAE together (with a combined population amounting to less than 1% of China’s) accounted for 11% of all tax-free sales in the same period.

The fact is that while the Chinese shopper is a key target, shoppers from the Middle East are among the biggest individual spenders and the loss of a single one of these shoppers is felt more keenly than a Chinese tourist who decides to rein-in his or her luxury spend.

And given that many luxury brands’ strategies in the UK (and in Europe generally) are all about targeting foreign shoppers, any disruption in GCC consumers' shopping habits is a major problem.

Patrick Waldron, CEO of Planet, said: “GCC nations have been impacted by falling oil prices and increased austerity measures in recent years. With the recent uptick in oil prices, we hope to see these consumer pressures ease and spending recover to pre-crash levels. 

“International shoppers’ significant contribution to the UK and European retail sectors represents a major opportunity for those merchants who target these markets correctly. With a clear understanding of the cultural nuances of shoppers from different parts of the world, and a focus on creating the right customer experiences, retailers will reap rewards very quickly and we are seeing this across selected retailers in the UK and Europe.”