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Everyone was in Europe this summer, it seems, if you’re an American with an Instagram account.
LA-based influencer Victoria Paris says this summer marked her first trip to Europe in six years. Others, like New York-based influencer — and Euro summer purveyor — Audrey Peters and British-born, LA-based Madeleine White, are back on their yearly European visits. Peters toured France, while White is hitting Mallorca, Ibiza and Montenegro.
Affluent US tourists have been descending on Europe for vacations and getaways — a retaliation to pandemic lockdowns that sent international travel bookings soaring 200 per cent this summer versus 2022, according to the American Automobile Association. And they’ve been setting out to shop, despite a levelling off of the exchange rate. This was the case even as luxury brands reported a decline in North American sales in recent earnings — a symptom of aspirational customers cutting back, not luxury shoppers.
“So many of the US tourists that are going to Europe also buy luxury,” says Michael Kliger, CEO of German retailer Mytheresa. “For some of the money that brands don’t see on Madison Avenue, they now see on Avenue Montaigne.”
This summer, American consumers are a primary driver of duty-free spend in Europe, capturing close to 25 per cent of market share, according to Bernstein’s August Global Luxury Goods report. They’re the biggest spenders in the region for tax-free tourist shopping, followed by Chinese consumers. More Americans planned trips abroad this summer than last: 22 per cent of US travellers planned to fly internationally, up from 14 per cent in 2022, according to Deloitte’s 2023 summer outlook. And more planned trips to Europe, with 57 per cent of respondents planning a European getaway, up 8 per cent on 2022.
For American shoppers, there’s incentive to spend while abroad. Technology company Wise estimates that US consumers can save on average 9 per cent on popular luxury handbags, shoes, clothing and jewellery thanks to local pricing differences, particularly on French and Italian brands.
Peters — who has spent summers in Europe since before she could walk, she says — knows this from experience. “Certain items, especially handbags, are significantly cheaper in Europe, so you end up saving a significant amount by buying them in countries like France or Italy,” she says. “Especially when you’re buying multiple items at once, you ll save a ton.” Among Peters’s purchases this summer were Miu Miu sunglasses and ready-to-wear items. Her favourite bargain of the trip? A cotton poplin Prada dress. On the US site, the dress would set a buyer back $4,800 (pre-tax). The same dress in Euros costs €3,400 — or $3,697.
Paris department store Le Bon Marché Rive Gauche buying director Catherine Newey has observed an uptick in US shoppers this summer. “Their number is increasing since many months now and their share in our turnover has also increased,” she says. “This trend was not anticipated at this level and we are pleased to continue to welcome US visitors.”
Newey adds that US consumers have been buying jewellery to celebrate special occasions “and create memories from their Parisian trip”. At Swiss luxury retailer Grieder, American consumers are looking for high end brands, according to a representative. In the Geneva store, for instance, many American women purchased Max Mara and Zimmermann dresses.
Summer sales and tax-free finds
American luxury shoppers often wait until the European summer time comes around to splurge.
“[I] have actually built relationships with sales associates at my favourite stores abroad and they will hold the things I’m looking for until I arrive,” Peters says. “I almost always have my eyes on a pair of shoes or a going-out top.”
But, she cautions, the waiting game isn’t for every brand. “I don’t want to buy anything Chanel [in Europe] because there really is no guarantee what you re looking for will even be there when you arrive — because just about anything Chanel sells out so quickly.”
British-born White takes a similar approach. “I never shop in LA,” she says, adding that US taxes always make items even more expensive than the sticker price. “I always say, when looking in preparation for a trip, that the [full] price in Euros is [roughly] what it is pre-tax in the States.”
Plus, summer is sale time, as Paris discovered in Antwerp. And then in Paris (the city). “I really went in on those,” she says, citing APC Vintage as a favourite. European summer sales — one of two key sales periods for the region (the other being winter) — are a key sales period for local stores. So much so that France extended its state-controlled sales period by one week, until 1 August, this year following the June riots in Paris. It was, in part, a bid to ensure the country was able to capture high-spending tourists’ luxury spend.
On top of cheaper prices and summer sales, when shopping in most European countries, American consumers can claim tax back — adding to the discount. France is the top tax-free goods destination in Europe, according to consultancy Bernstein. It accounts for almost half of Europe’s tax-free sales. Second to France’s 46 per cent share (up from 30 per cent in 2020), Italy is now the second largest market for tax-free shopping in Europe at 19 per cent (up from 13 per cent in 2020), according to payment company Planet. US consumers are leading spend — and driving growth — in both markets, accounting for 27 per cent of all retail sales in France, and 33 per cent in Italy. Le Bon Marché’s Newey says the department store has noticed more international customers who want to shop tax free.
Travellers all over Europe are paying attention. In Paros, Paris was sitting in the car on her way to a boat tour, and overheard a group of American girls behind her. “I looked over at [one of the girls’] phone and she was scrolling through the Cartier website. They were talking about tax-free shopping,” Paris says. “Every time I go to the airport, it’s an hour wait for the tax refund.”
It’s hurting UK sales. “Reinstating tax-free [shopping in the UK] would give tourists a wider choice of destinations to choose from to shop,” Luca Cassina, president of retail at Planet, said in a statement. A proposal to reinstate the scheme will be debated in the House of Commons next month, following pushes from British brands and retailers including Burberry, Harrods and Selfridges to reinstate the scheme.
Away from Europe’s usual suspects, American visitors are also using their travels to discover new brands in less-expected locations.
“The biggest hit for shopping was surprisingly Antwerp,” Paris says. “There were all these really cool designers I’d never seen before.” She’s also found success in Paros, especially for jewellery. “It’s all the places I didn’t expect to shop,” she says.
White, meanwhile, is keen to hit an Ibiza shopping destination she’s been eyeing for years: Annie’s Ibiza. “They have the sparkly dresses worn on White Lotus,” she says, referring to the Clio Peppiatt garments worn by actresses Simona Tabasco and Beatrice Grannò’s characters in season two. The brand is famously stocked by Annie’s Ibiza (whose only locations are on the Spanish island and just off London’s Carnaby Street).
The currency consideration
The euro weakened considerably in 2022, hitting parity with the dollar for the first time in 20 years as the energy crisis gripped Europe. For American tourists, this meant their dollar stretched further. But this year, the trend has started to reverse (It was $1.08 to the euro at the time of writing).
For those looking to shop, be it for international luxury or local gems, the current currency exchange rate from the US to Europe is on the mind — but it’s not a dealbreaker.
White is planning to be more careful than the year prior — but still intends to make a few purchases. “I have a couple of things I want to get while I’m here,” she says, citing sunglasses and sandals as her top picks. “But, I’m going to keep it a little bit more contained than normal just because the exchange rate is not as good.”
Peters, who recently returned to New York, also scaled back her shopping from last year, since the dollar was stronger than the euro this time around. But she still bought plenty. “The prices of designer goods in Europe are always cheaper in comparison to US prices, so it’s always a good deal,” she says.
As for how US consumer spending in Europe is likely to mitigate the slowdown seen in the States? “Companies that have reported so far have shown a contribution to growth of approximately 5 percentage points,” says Luca Solca, senior analyst at Bernstein. “This means they would report growth in the US in the low single digits negative, while growth in the American nationals in the single digits positive.” Meaning that US consumer spend may still be at lower levels, but their activity abroad is notable.
“So many Americans are saving up to go on holidays, but also to spend on holidays,” Paris says. “In every store, everyone’s speaking English, there are so many Americans.” She half-jokes: “It’s the big post-recession, still-recession boom, I guess.”
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