The slump in the value of the pound following the Brexit vote triggered a surge in spending on shopping by foreign tourists in the UK.
A further boost is expected over the Christmas period, with Chinese visitors leading the way as demand returns following an economic slowdown last year.
Retail tourism specialist Global Blue today reported a record increase in UK international tax free spend for November of 41%, year-on-year.
Equal with October, this is the highest monthly spend increase in three years since December 2013.
The latest figures, covering international shopping spend in the UK by visitors from outside the EU, follow consistently strong growth after June’s Brexit vote as tourists continue to take advantage of favourable exchange rates following the weakened pound.
A 7% rise in July was followed by a sharp increase of 37% for August, 29% in September and 41% in both October and November.
This came after an overall decline of 4% in the first six months of 2016. The recovery now sees international tax free spending up 14% for the year.
Global Blue UK and Ireland managing director Gordon Clark said: “The Christmas period is an incredibly important time for UK retailers. We expect to see an influx of tourists both pre and post-Christmas, as international shoppers buy unique British luxury goods to take home as presents.
“December 2015 saw a worrying 7% decrease, however this year is on track to deliver incredible results, given the current trading environment working in international visitors’ favour.”
November’s performance was largely attributed to consistent spend from Asian nations where demand is returning following a tumultuous 2015 in domestic markets, impacted by the economic slowdown in China.
Chinese visitors continued to dominate the total monthly share of UK international shopping spend, accounting for a quarter of the market, up 63% on the same period last year.
Visitors from Taiwan, despite accounting for just 1% of total UK international tax free spend, had the highest increase of spend, up by 160%, year on year.
Hong Kong shoppers followed closely with a spend increase of 127%, while visitors from the US increased their spending by 88% year-on-year.
Clark added: “Overall, we expect total UK international tax free spend for 2016 to finish on double digit growth, due to the visitor and spend surge in the second half of the year.
“This will be welcome news to retailers who have braved the tough trading environment amongst the political and economic uncertainty of 2016.”
However, the company wants to see a digital update in the current cumbersome paper-based system for tourists to claim back their tax and is backing government plans to overhaul the tax free shopping system, as outlined in last month’s Autumn Statement.
Clark said: “Hugely important, the tourist industry accounts for 9% of the whole of the UK’s GDP, with a value of £126.9 billion, £24.2 billion of which is generated by inbound tourism.
“Offering tax refunds makes great economic sense – it allows a country to compete with rival destinations for that valuable tourist spending.
“The variety, quality and cost of tax free shopping are major elements of our country’s appeal to international tourists giving us a competitive advantage, particularly over our European neighbours.”