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Travel restrictions and tax free shopping stop for Chinese tourists takes shine off ‘Golden Week’ for UK retailers…

How to open up China for growth (Image: Adobe Stock)

Travel restrictions on Chinese tourists travelling to the UK has seriously impacted UK retail footfall and online retail sales, data shows. In addition, the removal of tax-free shopping on 1 January could see them stay away for good.

China’s National Day Golden Week, which runs from 1 to 7 October usually heralds an unofficial kick-off to peak trading for UK retailer as it brings in an influx of Chinese tourists keen to shop. However, travel restrictions have seen this drop by more than a third this year.

In addition, even when travel restrictions can be lifted, the UK’s removal of tax-free shopping, which came into effect on 1 January 2021, may jeopardise the future performance of Golden Week for UK retailers post-pandemic. 

Original research of almost 15,000 consumers across 14 countries in eShopWorld’s ‘Global Voices: Pre-Peak Pulse 2021’ survey revealed that six in ten (59%) of Chinese respondents plan to make fewer visits to Britain and nearly two thirds (64%) say they will spend less on British brands once travel restrictions are lifted because of tax-free shopping being scrapped.

Golden week traditionally sees large numbers of Chinese visitors travel to the UK to celebrate and shop, providing a boost to UK retail.  In 2019, for example, Chinese shoppers spent an average of £485 each while visiting Great Britain during the national holiday period – up +70% year-on-year – according to Chinese payment provider, Alipay, while visitor numbers of Chinese tourists were also up 40% compared to the same period, figures from Figgy, Alibaba’s travel service platform, suggests.

However, due to international travel restrictions, with Chinese consumers urged not to travel internationally due to the covid-19 pandemic, UK retailers have missed on the usual ‘Golden Week glow’. 

Retail traffic data analytics within Sensormatic Solutions’ intelligent operating platform, Sensormatic IQ, which captures 40 billion shopper visits each year globally, shows that footfall during Golden Week was down 36% on pre-pandemic levels in UK shopping centres, while High Street footfall was also down 22% compared to the same period in 2019.

Andy Sumpter, Sensormatic Solutions’ Retail Consultant for EMEA, explains: “Undoubtedly, we’ve seen the traditional retail trading calendar upended by the impact of the pandemic, with many consumer behaviour patterns shifting, either due to restrictions imposed to curb the spread of the virus or by customers adopting different ways of shopping.  We know retailers will sorely miss the glow of traditional Golden Week trading – after all, in 2019 alone, the annual spend of Chinese tourists while visiting the UK topped £1.7bn, so they will be hoping tourist shoppers can return as the pandemic eases and international travel resumes.”

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