British luxury goods companies have seen a boost in sales in the wake of the Brexit vote as figures show that international firms are snapping up high-end items such as jewellery and watches to take advantage of the drop in the value of the pound.
The British Retail Consortium (BRC) said the jewellery and watches category of its monthly retail sales monitor had recorded its strongest growth since records began in November 2014.
It said other retailers were also benefiting from tourists visiting the UK to take advantage of lower prices, especially of high-end goods.
The report comes as research from travel analytics firm ForwardKeys revealed flight bookings to the UK rose 7.1 per cent in the four weeks after the vote, boosted by the collapse in the value of sterling.
Meanwhile, like for like retail sales – in stores which had been open for more than a year – increased by 1.1 per cent compared to the same time in 2015, despite gloomy consumer confidence surveys in the weeks since the Brexit vote.
Sterling is still lower in value against currencies including the euro and dollar than it was before the 23 June referendum, although it has rebounded from record lows.
In the days after Brexit, the pound fell to a 31-year low against the dollar.
David McCorquodale, head of retail at KPMG, which co-authored the report with the BRC, said good weather had lifted sales of food and drink, as well as certain types of fashion.
He added: “Sales of jewellery and watches also improved as international consumers took advantage of the weaker sterling to splash out on more expensive purchases.”
The BRC report said some other UK retailers have also seen a boost as a result of the falling pound – but mainly in sales of high-end goods.
It said in the report: “There is anticipation that some wealthy foreign tourists are taking advantage of the post-EU referendum weakness of the pound sterling to holiday and shop in the UK, however the impact was not felt across all retailers.”
Leigh Sparks, professor of retail studies at Stirling University, said : “We’ve got a lot of affluent visitors coming at the moment, particularly in the south east and London.
“When you think of jewellery and watches, you’ve got big name brands and these products are at the end of the market which benefits from the fall in the value of the pound so it’s not surprising some of them are taking advantage.
“The question we don’t know the answer to, however, is where does it go next.”