The cheap pound is a bigger draw than Big Ben right now.(Reuters/Kevin Coombs)
Since UK?s Brexit vote on June 24, interest in travel to London has spiked. Shopping in the city is one of the big draws, and since Britain?s vote to leave the European Union, it?s as if the whole country?s goods are on sale for anyone shopping with foreign currency.
That?s because the Brexit vote sent the value of the pound crashing. Yesterday (July 5), it fell to below $1.31 against the US dollar, bringing it to a low it hasn?t seen in 30 years. This has created a rush of foreign buyers looking for bargains. But while this may bring UK companies a bump in spending now, the long-term outlook is far less rosy.
British retailers, especially in the luxury sector, seem to already be seeing a surge in sales. Burberry, which gets about 60% of its UK revenue from tourists, hasn?t reported any sales figures, but research by Edited, a retail technology company, found that in the week after Brexit, the brand saw a 50% increase in full-price sellouts online compared to the previous year. British luxury retailer Matches saw a 90% increase. (Globally, by contrast, Edited says full-price sellouts online were down 48% last week compared to the previous year, as uncertainty appears to be stifling luxury purchases.) These trends are likely to continue for at least a short while, as long as the pound remains low. But the picture changes once?or perhaps if?Britain exits the EU.
That?s partly because there?s no gro...