© Written by Rachael Taylor for The Future Laboratory
Brexit has left the UK luxury sector divided, with a thriving tourist trade driven by the exchange rate and a domestic customer base hindered by uncertainty. Can brand innovation and a Millennial state of mind redress the balance?
Tourists remain the most lucrative consumer base for luxury goods companies in the UK. With visitor numbers at an all-time high in 2017 (source: VisitBritain), this seems unlikely to change. But domestic growth is evident, with 7% of British shoppers claiming to have traded up their buying habits in 2017 (source: McKinsey & Co).
- 5% of all luxury and 5.6% of all affordable luxury store openings happened in London in 2017, making it one of the most desirable cities for retailers (source: Savills)
- £1 in every £4 of sales of British luxury goods is attributed to tourists (source: Walpole)
- Luxury goods in the UK are, on average, 22% cheaper than in China, its main source of tourism (source: Deloitte)
As Britain remains locked in extended negotiations about its exit from the EU, a cloud of uncertainty hangs over its luxury market. Such apprehension comes both from British nationals being unsure of their financial future, and the estimated 2.9 million EU nationals (source: Office for National Statistics) who are uncertain whether they will be allowed to stay in the country…
This story was originally published on The Future Laboratory on July 30, 2018. Read the full report here. (main image: David Morris)