U.S. stores may face foreign shopper hangover

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The gift that keeps on taking
Dec. 17: Gift cards, a last-minute measure for many shoppers, are increasingly popular, but with $8 billion left in unspent store credits from last year, it's the retailers who are grateful. NBC's Kevin Tibbles reports.

Nightly News

“The reality is that this is a great moment of time,” said George Fertitta, CEO of NYC & Company.

Since late last month, the dollar has steadied.

Nevertheless, since the beginning of the year, the U.S. dollar has fallen about 9 percent against other major currencies, according to the Federal Reserve. Carl Steidtmann, chief economist at Deloitte Research, expects the dollar to lose up to 10 percent of its value next year.

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For foreign shoppers, that means right now at least a 30 percent discount on merchandise; the savings can be more on hot items with limited distribution overseas like UGG boots. For example, shoppers from Britain like Nini Adwars say that the UGG boots cost about 200 pounds in London, or $400, but in the U.S., the footwear retails for about half the price. Adwars also planned to buy jeans at Abercrombie & Fitch, which she said cost double in London.

Mall of America, the nation’s largest retail and entertainment complex, estimates a 15 percent increase in the number of foreigners this holiday season, compared to a year ago, according to Doug Killian, director of tourism. The biggest group are the Canadians, followed by visitors from Britain. Canadian businesses are already hurting as their customers cross the border in droves to shop in the U.S., thanks to a strong Canadian dollar.

Killian noted that international tourists spend on average 2.5 more times per visit compared to a local shopper.

“There’s no question that our international business is helping us,” said Killian.

Bloomingdale’s, which tracks foreign visitors at its visitors’ centers in New York, Chicago, San Francisco and Miami, reports at least a 30 percent increase in foreigners in October and November from a year ago. Among the popular brands are Chanel, Armani, Juicy Couture, Seven for All Mankind and the hugely popular UGGs, company officials said.

Foreign shoppers, armed with lists, are focusing on specific status labels, and are doing plenty of price comparisons.

Yong Feng Zhang, a 30-year old international law student from China, recently eyed a $795 Burberry bag at Bloomingdale’s store in Chevy Chase, Md.

“I can buy two bags (here) instead of one in China with the dollar so under valued compared to the Chinese Yuan,” said Zhang. “The brand is very popular in China.”

Welsh tourist Allison Watkins, who was at Bloomingdale’s Manhattan location last week, said she was there to buy ties, Diesel jeans and makeup. But she passed on an electronic memory card at another store when she realized there wasn’t much of a savings.

“I compare everything,” she said.

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