NEW YORK — The nation’s stores should enjoy those hordes of foreign holiday shoppers taking advantage of the weak dollar and snapping up iPods, status jeans and more because next year the prices may not be as good.
When U.S merchants rebuild their inventories of luxury and other status goods next year, some analysts say they may feel some pain as manufacturers overseas start passing on higher prices to stores — dealing a blow to shoppers both from the U.S. and abroad.
“When tourists are coming they are not buying the stuff that we make. They are buying the stuff that we imported,” said Peter Schiff, chief executive of Euro Pacific Capital, a brokerage firm in Darien, Conn. “U.S. retailers are getting a shot in the arm, but by next year, the discrepancy won’t be there.”
As the dollar weakened in recent years, prices of European handbags, clothing and shoes have already started to creep up, and the cumulative effect has some stores concerned. Luxury consultant Robert Burke said some Italian ready-to-wear brands have seen prices rise as much as 20 percent in the last two years; consumers are now paying 10 percent to 15 percent more on status shoe brands such as Jimmy Choo, which now average between $600 to $700, Burke said.
For now, U.S. merchants are enjoying the swarms of shoppers from abroad.
In New York City, the top U.S. destination for foreign tourists, two million visitors from abroad are expected this holiday season, up 3.5 percent in the year-ago period, according to NYC &Company, the city’s official tourism and marketing organization.
No counts are available for Snohomish County, but a look at local mall parking lots on weekends shows a large number of vehicles licensed in British Columbia. Seattle Premium Outlet Malls in Marysville opened at midnight after Thanksgiving and reported strong crowds bolstered by Canadian visitors.
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.
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 such as UGG boots.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
