More spending in London after pound falls, Latest Business News - The New Paper

More spending in London after pound falls

This article is more than 12 months old

While Brexit is weighing on much of the British economy, the tourism industry and luxury goods businesses are cashing in on bargain-hungry visitors lured by the slide in the pound.

London's tourism agency said sales of goods eligible for sales-tax exemption have gone up by a third since the Brexit vote in June, which sent the pound plunging against the euro and US dollar.

"We calculated that over the last four months, it has been about 12 per cent cheaper for Europeans to shop here," said Mr Chris Gottlieb, head of leisure marketing at the agency London & Partners.

The pound is now at 1.17 euros compared with 1.3 euros before the shock vote to leave the European Union. It has also fallen to US$1.25 from US$1.49.


As a result, London became the cheapest city for luxury goods shopping in dollar terms, according to a study by Deloitte.

In tourist areas, the effects are evident, reported AFP.

"We're going to spend much more money than we planned to," said Bulgarian tourist Radostina Nonova, who was lugging her bags in the heart of London's shopping district.

"We didn't plan to shop too much, but it's obvious that the prices are very good for us.

"So we shop. And we can afford to eat and drink outside. That was not possible years ago," she added.

Mr Denis Sagajevs, who works in Shinola, a shop selling watches and leather accessories, said: "We're an American brand. Our products are designed and assembled in the US. But with the weakening of the pound, it actually happens to be cheaper for American tourists to buy an American product in London."

Shops are now adjusting their advertising and sales tactics to the new consumer behaviour.

The manager of a luxury men's clothes shop said that, before the vote, European tourists were couples who bought just a few things.

"Now, there are groups of friends who rush in. They grab everything they can carry."