LONDON: For British tourists heading to the Big Apple to take advantage of a weak dollar and stock up on bargains, the choice is clear: saving money comes before saving the planet.
With sterling hitting its highest levels against the dollar since 1981, British media are cranking up headlines on the number of people jetting to the United States to pick up bargain designer clothes and electrical goods.
“The weak dollar is certainly helping a few shoppers find their way to the US,” George Stinnes, head of investor relations at British Airways, said earlier this month when the company reported passenger numbers on routes to the Americas had jumped 7.4 per cent in October from a year ago.
Those who have witnessed the sharp-elbowed frenzy of retailer Harrods’ sales may not be surprised to learn that for some shoppers, the lure of cheap trendy Ugg boots and iPods outweighs the 2,000 kg or so of carbon dioxide the return flight pumps into the atmosphere.
The transatlantic bargain-hunting contributes to Britain’s status as the eighth-largest emitter of carbon dioxide in the world, according to US Department of Energy figures.
The shoppers are crossing the Atlantic as concerns at home mount about the scale of fallout from the US credit crunch and British retail is nervous: retail sales fell in October for the first time since January.
But if travel is included, Britons who ignore their carbon footprint as they leap aboard transatlantic flights to bag cheap luxuries may well end up spending more than they would at home.
Many major currencies have boomed against a dollar weakened by investor fears about the health of the US economy — particularly after banks announced over $50 billion of write-downs on assets linked to the troubled housing sector.
With sterling at its strongest versus the dollar in 26 years, a rule of thumb for British shoppers is to halve the dollar price of goods to get their cost in pounds.
On top of travel costs, returning Britons face a limit of $298 in the value of goods imported, after which they must pay 20 per cent tax. Attempted evasion — or ignorance of the limit — is penalised by doubling the tax.
Even if more shoppers are heading to the United States, Britain’s Revenue and Customs office (HMRC) says it has not seen an increase in goods brought back, adding that it targets mainly large-scale multiple purchases.
Some shoppers say they unpack US purchases immediately, and work them to make them look ‘used’ before flying home.
The bargain-hunt can go beyond consumer goods. Travelex, a London-based currency exchange company, said dollar purchases in Britain had risen by 40 per cent since the pound began to hit new highs — partly on demand for shopping, but also on a gamble that the greenback itself may, at current levels, be a steal.
“We’re ... seeing that customers are taking advantage of the current rate by actually stockpiling US dollars,” Antony Hudson, its UK retail director, said.
By this time next year, currency strategists expect the dollar to have recovered slightly. But whatever the exchange rate, environmental campaigners acknowledge that concerns over climate change are unlikely to dent people’s enthusiasm for flying — for bargains or not.
Passengers pay a fee to counterbalance the emissions from their flight, which goes towards projects such as a hydropower plant in Indonesia or Indian biofuel technology.—Reuters
