Picture courtesy Life magazine

Another report about UK shopper footfall came out yesterday but I didn’t report on it because it was yet more of the same – store traffic down, not many people interested in spring clothes etc etc.

But yet another set of figures is out today and I’m reporting this one because it really highlights just how deep the current shopping problems go as it’s about tourists cutting back their spending, not just the rest of us. Tourists, it seems, reduced their shopping budgets in double-digits last month.

Global blues

The latest Global Blue/Barclays Research figures (report in WWD) for April show global spend by tourists down 12.8% with Europe down an even worse 15%. Asia-Pacific fell 10.3%. That wouldn’t be quite so bad were it not for the fact that spend had fallen 14.4% globally in March and 23% in Europe. That was the worst since the figures began in 2010.

Chinese shoppers were again key with their spending down 18.5% (after a 23.6% March drop) while Russian spend fell 20.8% in April. Although Chinese spend in all regions is falling, in Europe it seems to be particularly vulnerable. Barclays Research is blaming a crackdown by the Chinese government, terrorist attack fears and biometric visa changes, as well as stricter measures to cut the level of parallel imports into China – although it didn’t expand on just how that would hurt Chinese spending abroad.

The terrorism issue could be a big factor given that tourist spending in France fell 23% last month, although Germany, which hasn’t suffered terrorist attacks, was also down a massive 20.3%. Other countries were less affected with the UK down a still-hefty 10.3%, Switzerland and Italy both down 7.8%, and Spain down 6.8%.

Local blues

Shoppers are being more cautious when they’re travelling, which is devastating news for the luxury sector. But they’re also holding back locally and report after report shows visitor traffic to stores down, anaemic online sales rises (after years of leaps and bounds) and generally unimpressive retail sales figures.

So what’s causing domestic shoppers to rein-in spending. We know that UK shoppers are unwilling to open their wallets and lots of people are blaming the uncertainty around the ‘Brexit’ vote. For those of you not in Britain, that’s the June 23 vote over whether the UK stays in the EU or decides to jump off a cliff and leave it.

But that vote can’t be affecting shoppers in the US and I’ve seen more than one report in the past few weeks asking “why aren’t Americans spending?” Hence pretty brutal results announcements from JC Penney, Gap and Macy’s recently.

The conclusion there seems to be a mixture of factors from the cool, damp spring weather (also affecting Europe) to uncertainty around the Presidential election, to the polarising effect of Donald Trump and a fundamental change in what consumers expect when they go in-store or online. And that expectation? Wall-to-wall discounts.

Stores are still selling billions of pounds, dollars and euros worth of goods but their margins are being eroded at a time when they’re having to pay higher minimum wages (not that I’m complaining about that because it’s about time). This all hurts profits, which dents the share price and the annual dividend.

Perhaps we’re just living in difficult times. With the recession of a few years ago still fresh enough in people’s minds, the weather not playing ball, the discount habit becoming so ingrained, fears over fast political change, terrorism and more, shoppers are just taking a wait and see approach. So what if they miss out on those must-have sandals… they’ll probably be marked down in a few weeks anyway.