International shoppers buy British in the wake of Brexit
International shoppers kept the virtual tills ringing in the wake of the vote for Brexit as cross-border orders hit a record high for July, new data suggests.
More than a quarter (almost 27%) of orders placed with UK retailers during the month were destined for overseas shoppers, according to the IMRG MetaPack UK Delivery Index.
July was the second month in a row that the proportion of orders bound for overseas destinations neared 27%. Normally, says IMRG and MetaPack, around 23% of sales are cross-border ones. Average order values for cross-border sales fell sharply last month, following the fall in value of sterling against the dollar and euro, in the wake of June 23's referendum. But in July, the first full month following that event, average order values recovered to an extent, though they were still below usual expectations.
The index estimates that in July, UK retailers – excluding those trading through marketplaces – collectively sent out more than 98m orders, 11% up on the 88m that were sent out at the same time last year. Just over 26m, or 26.7%, were sent to international destinations. That's up from 21m, or 24% at the same time last year. Of those international parcels, 15.5m, or 55%, were sent to the EU. That's 35% up on the 11.5m parcels sent to EU destinations at the same time last year.
Estimated UK orders, meanwhile, rose by a more modest 7.5%, reaching 72m in July – up from 67m last July.
Andrew Starkey, head of e-logistics at IMRG , said: “While it’s hardly surprising that cross-border volumes have risen since the Brexit vote, the question is whether this upturn in orders will be temporary or sustained over a longer period. As the July average order value has risen on June, we might surmise that shoppers initially used the opportunity to snap up a bargain or two, but are now realising that the deals are very attractive and are loading up their baskets with more goods each visit. While this upturn is good news in a way, clearly there will be pressure on margins due to all products being discounted for cross-border shoppers, in effect.”
Kees de Vos, chief product officer at MetaPack , said: “July is usually a month in which retailers enjoy a mini-peak in sales, but the impact of Brexit on shopper confidence is now being felt. The increase in order values from EU consumers snapping up bargains thanks to the drop in sterling is welcome, however. We expect that over the next few months we’ll see a return to much greater volume growth, ensuring that forecasts for the year are met.”