Foreign shoppers hit 'mall of America' as dollar plunges

New York: "So where are the shops?" asks John Bainbridge, who is just off the plane from Yorkshire, England.

After getting directions to Bloomingdale's department store, Bainbridge, his wife, daughter, granddaughter, and two friends are off to buy their Christmas presents - at prices only someone from Europe considers cheap.

This holiday period, some US retailers will find planeloads of foreign tourists taking advantage of the weak - and getting weaker - US dollar. They are arriving with empty suitcases and shopping lists and leaving with Levis, handbags, shoes and computers. Most are arriving for just two or three days or even a single day of mad "bargain" hunting. And for those who don't want to deal with the overseas travel, some e-retailers are redesigning their websites in foreign languages and adding currency translation aids.

"The US is one big discount shopping mall for foreigners," says Scott Krugman, a spokesman for the National Retail Federation in Washington.

It's not just the English, Germans and French cleaning out the shelves. To the north, the Canadians are flexing their Loonies. Out west, there are sightings of Australians armed with a strong currency. And their ability to buy just keeps going up. Last week, the dollar fell to another record low against the euro. And last month, the Federal Reserve reported the dollar hit the lowest level against a basket of major currencies since July 1995.

One of the factors behind the drop: the slowing US economy and concerns that the Federal Reserve will have to drop interest rates again in December.

But if the economy is hitting the brakes, there was no sign of it on the day after Thanksgiving, better known as Black Friday, since that used to be the day when many retailers posted a profit for the year.

According to Chicago-based ShopperTrak RCT Corp, which monitors sales at more than 50,000 stores, sales rose 8.3 per cent over last year.

Outlook

Despite the strong day and the boost from foreign buying, analysts were still cautious about the prospects for the season. "We're still sticking to a four per cent increase over last year," says Krugman. A chief concern is the price of gasoline, which is averaging $3.07 a gallon. In surveys, US consumers say the rising price will limit the trips to the mall.

Foreign shoppers know they wield the power of the purse. Some 97 per cent of Canadians were aware of their currency's strength compared with the dollar, according to a poll conducted by the International Council of Shopping Centers last month. Thirty per cent of Canadians polled intended to cross the border to shop in the US or buy online from the US.

Some e-retailers are targeting foreigners this holiday period. That's the case at eFashion Solutions, which now sells its 35 brands in 12 currencies and six languages. "For the company as a whole, we're shipping 20 per cent outside the US, with the goal of reaching 30 per cent by next June," says CEO Ed Foy.