Foreign shoppers hit 'mall of America'
Thanks to weak dollar, more Europeans and Canadians are traveling to US to do their holiday shopping.
New York — "So, where are the shops?" asks John Bainbridge, who is just off the plane from Yorkshire, England.
After getting directions to Bloomingdale's department store, Mr. Bainbridge, his wife, daughter, granddaughter, and two friends are off to buy their Christmas presents – at prices only someone from Europe considers cheap.
This holiday period, some US retailers will find planeloads of foreign tourists taking advantage of the weak – and getting weaker – US dollar. They are arriving with empty suitcases and shopping lists and leaving with Levis, handbags, shoes, and computers. Most are arriving for just two or three days or even a single day of mad "bargain" hunting. And for those who don't want to deal with the overseas travel, some e-retailers are redesigning their websites in foreign languages and adding currency translation aids.
"The US is one big discount shopping mall for foreigners," says Scott Krugman, a spokesman for the National Retail Federation in Washington. The overseas bargain hunters might not be enough to make the season sparkle for retailers overall, he cautions, although "the foreign buying will help certain stores."
It's not just the English, Germans, and French cleaning out the shelves. To the North, the Canadians are flexing their Loonies. Out West, there are sightings of Australians armed with a strong currency.
And their ability to buy just keeps going up. Last week, the dollar fell to another record low against the euro. And last month, the Federal Reserve reported the dollar hit the lowest level against a basket of major currencies since July 1995.
One of the factors behind the drop: the slowing US economy and concerns that the Federal Reserve will have to drop interest rates again in December.
But if the economy is hitting the brakes, there was no sign of it on the day after Thanksgiving, better known as Black Friday, since that used to be the day when many retailers posted a profit for the year. According to Chicago-based ShopperTrak RCT Corp., which monitors sales at more than 50,000 stores, sales rose 8.3 percent over last year.
Despite the strong day and the boost from foreign buying, analysts were still cautious about the prospects for the season. "We're still sticking to a 4 percent increase over last year," says Mr. Krugman. One of the chief concerns: the price of gasoline, which is averaging $3.07 a gallon nationally. In surveys, US consumers say the rising price will limit the number of trips they make to the mall.
Bloomingdale's seems to be scooping up its fair share of European currencies, judging from the half-dozen bags being carried by Nicola Taylor and Rachel Omahony of Herefordshire, England. Pointing to a bag, Ms. Omahony says, "Uggs," referring to the brand of boots. "At home, they are £180, here they are $100 [£49]." Her friend, Ms. Taylor, says the savings are comparable for Levi's blue jeans. "It's all really quite reasonable," she says with a smile.
To haul home the loot, many foreigners are arriving with extra luggage. "There were two ladies on our flight with six or seven empty suitcases," recalls Bainbridge.
Foreign shoppers know they wield the power of the purse. Some 97 percent of Canadians were aware of their currency's strength compared with the dollar, according to a poll conducted by the International Council of Shopping Centers last month. Thirty percent of Canadians polled intended to cross the border to shop in the US or buy online from the US.
Some e-retailers are targeting foreigners this holiday period. That's the case at eFashion Solutions, which now sells its 35 brands in 12 currencies and six languages. And it has negotiated with the United States Post Office to zip its goods abroad for a reasonable price.
"For the company as a whole, we're shipping 20 percent outside the US, with the goal of reaching 30 percent by next June," says CEO Ed Foy.
But for most foreigners, the plan is to take advantage of the weak dollar right now. A couple from London standing outside Carnegie Hall don't have time to talk. "We're only over here for the day," says the woman. "We have to shop."