*NEWS*SHOPPING AS THE DOLLAR DROPS
*NEWS*SHOPPING AS THE DOLLAR DROPS
2006-12-04 at 10:42:00 am #16954
Shopping as the Dollar Drops
A hot destination for European travelers this winter: Minnesota.
a Holiday Inn near the Mall of America, the giant shopping center just
outside Minneapolis, foreign tourists shopped so much this week that
the hotel had to set aside four guest rooms to hold their suitcases
after filling up its baggage-storage room.
flocking to U.S. stores for Christmas shopping because the dollar’s
weakness makes the U.S. look like a bargain basement to them. The
British pound yesterday hit a 14-year high against the dollar, and the
euro has hovered around historic highs, too.
With more retailers
opening globally, it’s easy for Europeans to do a little research to
find out how much cheaper the U.S. is than their home countries. And
travel agents, airlines and hotels are marketing heavily to bring
overseas shoppers to the U.S. in the hope that the lure of a pair of
Levi’s jeans that costs half what it does in Europe will override
America’s onerous entry requirements for foreigners.
this week, only a few hours after her plane landed in New York from
Edinburgh, Kay Sandeman, a 22-year-old Scot, was at Rockefeller Plaza
shopping with her mother. She was clasping a photocopied article from a
U.K. magazine that had tips on where to find bargains in the U.S.
“Look,” Ms. Sandeman says of the prices. “It’s almost half.”
York City’s tourist board expects 7.3 million foreign visitors this
year, up from 4.8 million in 2003, its low point after the Sept. 11,
2001, terrorist attacks. The biggest single group by far are the
British, and 95% of them say they go shopping during their visit –
while only 39% plan to visit a museum, says NYC & Co. The Four
Seasons Hotel in New York has seen an 18% rise in European guests this
year. Many Europeans are also upgrading to four- or five-star hotels,
instead of three-star accommodations, says Lisa Warner, assistant
marketing manager for Trailfinders, a large travel agency based in
Some airlines and tour operators are trying
to stoke demand even more with sales, and say they can afford to
because they’re passing along savings from a weaker dollar. Since it
takes fewer pounds to pay for a hotel room, tour operators can lower
the price they charge Britons in pounds. When British Airways recently
renegotiated its contracts with a series of U.S. hotels, it cut the
price of a night in the Lenox Hotel in Boston to £100, from £124. It
also extended a London-New York pre-Christmas fare of £248 by nearly
two weeks, a BA spokeswoman says.
U.S. retailers are advertising
overseas to grab the attention of Europeans planning their shopping
trips. The Chelsea Premium Outlets, a chain that includes discount
outlets in New York, Las Vegas and Chicago, is providing voucher
booklets to 24 U.K. tour operators, double the number it offered last
At London’s Heathrow airport yesterday morning, waiting to
check in for a flight to New York, Donna Sinclair’s sons were planning
their shopping. Ben, 10, wanted an iPod and Sam, 13, says he wanted
“some cool trainers” — Britspeak for sneakers — ideally Nike Air.
exchange rate is brilliant, it’s practically doubling your money,” says
Ms. Sinclair, 35 years old, from Great Yarmouth. Her husband brought
only two changes of clothing and one pair of shoes in anticipation of
This isn’t the first time Europeans have smelled
a bargain. Clothing has historically been less expensive in the U.S.,
and U.S. retailers tend to mark down more items than European stores.
Morgan, a 49-year-old who lives in England, this week shopped with
three friends on Fifth Avenue, where they picked up bracelets at
Tiffany’s, Estee Lauder makeup at Bloomingdale’s and stuffed animals at
the Disney Store. “It’s like a military operation,” she says. “We know
how to do this.”
But they missed out on a new line of jeans
designed by British celebrity Victoria Beckham, which retail for as
much as £325 in England but cost about half that in New York.
Bloomingdale’s had sold out.
Last Saturday, Patti Lee, the
general manager of Macy’s Herald Square store in New York, met two
British women who were shopping and who asked her for directions to a
particular department. “They each had three or four shopping bags and
it was their fifth trip” to New York, says Ms. Lee. Macy’s offers
international visitors a card that offers them an 11% discount, and its
salespeople are equipped with charts to help foreign visitors convert
Travelers returning to Britain from the U.S. are
supposed to pay import duty and tax on all purchases exceeding £145
(excluding limited quantities of certain items such as cigarettes and
liquor). The European Union requires travelers to pay tax on purchases
exceeding €175. But many don’t bother to declare their purchases.
pound hit $1.9699 Thursday, a new 14-year high. At 4 p.m. in New York
trading, the pound stood at $1.9659 while the euro was at $1.3244. Some
expect the dollar to weaken further, possibly touching $2 to the pound
on concerns about slowing growth prospects in the U.S. and possibly
lower U.S. interest rates.
The weak dollar is stoking demand for
other services, too. Wendy Lewis, a plastic-surgery consultant, says
more of her British clients are traveling to the U.S. to take advantage
of the exchange rate. Ms. Lewis says New York is the No. 1 destination
for Britons seeking plastic surgery, followed by Boston. “A facelift in
the U.S. of top, top quality is $15,000 — so that’s half of what it is
[in the U.K.],” she says.
Some foreign tourists can afford a
meal that might be prohibitively expensive at home. Gordon Ramsay, the
British chef who has several Michelin-star restaurants in London,
opened a new restaurant in New York this month. His New York outpost
charges $110 for its seven-course “Menu Prestige,” which includes foie
gras and apricot soufflé. The “Menu Prestige” at one of Mr. Ramsay’s
London restaurants costs £110 pounds, or $216 at current exchange rates.
weak dollar is even encouraging many to make a trip for the
post-holiday sales. Trailfinders recently launched a three-night
package to Minneapolis to visit the Mall of America in January (average
temperature: 12 degrees Fahrenheit). The package costs £399, or $785,
and includes a direct flight from London and three nights in a
The Mall of America plans to double in size in
the next four years, and is planning to add more luxury shops and a day
spa to appeal to European travelers, who spend more than twice what
local shoppers do. About 6% of the Mall’s 40 million visitors a year
are from overseas, and its executives hope to double that percentage,
says Doug Killian, associate director of tourism for the mall.
von Braun, a mother of two from Bonn, Germany, recently went on a
shopping spree at the mall. She bought a corduroy shirt and a pair of
sand-colored corduroy children’s pants at Gap. For the price of the
pants, $17, “you can’t even get a T-shirt in Europe,” says Ms. von
Braun, who also bought some pieces by fashion brand Juicy Couture for
her neighbor. “Juicy Couture is prohibitively expensive back home.”