News & views

24 November 2009

New York Christmas Bargains Drive Dollar Demand

First Rate Exchange Services (First Rate) is anticipating strong demand for US dollars during the next month as sterling’s rising strength against the dollar makes New York an attractive destination for UK bargain hunters wanting to save cash on Christmas gifts.

First Rate’s largest foreign currency retailer is the Post Office and its comments follow the publication of the Post Office’s annual Christmas Shopping Guide which has revealed that shoppers can save an average of 20 per cent on gifts in New York compared with London (www.postoffice.co.uk/shoppingguide2009).¹

Gordon Gourlay, Managing Director, First Rate said: “Our foreign currency retailers have reported a sharp increase in demand for US dollars during October, as sterling started to strengthen against the currency, currently standing 12.7 per cent up the same time last year. This, combined with the availability of some extremely competitively-priced short breaks2, means we’re expecting even greater demand from transatlantic travellers in the run up to Christmas.”

In the survey of prices for 10 of this year’s ‘must-have’ gift items, the biggest New York savings were on True Religion jeans (£119.21) and Elizabeth Arden Eight Hour Cream (£11.79) – both costing at least 46 per cent less than in London.

The survey revealed that local prices have risen one per cent year-on-year in London and New York.  However the improvement in the sterling exchange rate, which has risen by over 23 per cent compared with its low point in March this year, means that the New York shopping basket is actually four per cent cheaper than 12 months ago.

For the first time this year, the survey also compared prices for the most sought-after Christmas toys, establishing a 27 per cent differential between London and New York3.  Five toys named by a leading UK retailer as 2009’s top sellers cost £183 in London but only £133.03 in New York.

Changes this year to the duty free regulations mean that holidaymakers can now bring back more gifts back from the USA because the duty free allowance has more than doubled to £340.  Christmas shoppers should also remember that additional savings can be made by shopping in stores like Bloomingdales, which offer an 11 per cent discount to UK visitors to offset the 8.875 per cent New York sales tax.6”

Notes to Editors:

¹ Post Office 2009 London and New York Christmas shopping cost comparison:

Item	London	New York	% price difference
Elizabeth Arden Eight Hour Cream 50ml	£22.00	£11.79	-46
True Religion 'Becky' jeans	£220.00	£119.21	-46
Abercrombie & Fitch 'Cassandra' hoodie	£60.00	£38.19	-36
Ugg 'Classic Short' boots	£150.00	£96.76	-35
Converse All Star High Top men’s sneakers	£36.99	£28.65	-23
Canon Powershot A480 digital camera	£89.99	£75.60	-16
Apple iPod nano 8GB	£107.00	£94.85	-11
Chanel No.5 eau de toilette spray 50ml	£46.00	£41.38	-10
Ray Ban Aviator sunglasses	£109.00	£103.96	-5
TOTAL	£840.98	£610.39	-20
PERCENTAGE +/- 2008 v 2009	+1%	-4%

Source: Post Office. Data relates to exchange rates on 16 November 2009. UK prices sourced from Apple Store, Comet, HMV, Harvey Nichols, House of Fraser, Selfridges, Abercrombie & Fitch and Office. New York prices sourced from Apple Store, J&R, Bloomingdales, Macys, Barneys, Abercrombie & Fitch and Ugg.

2 Departing 1 December, a three-night Christmas shopping break is available through Hayes & Jarvis (0871 664 0246/hayesandjarvis.com) at £649 per person, including three-star accommodation at the Holiday Inn in Manhattan’s Chelsea district and British Airways flights from Heathrow.

3 Post Office 2009 top toys comparison in London and New York:

Item	London	New York	% price difference
Rubik's 360	£20.00	£10.39	-48
Barbie & the Three Musketeers doll	£27.00	£15.93	-41
Transformers Bumblebee Helmet	£50.00	£31.87	-36
Kidizoom camera	£55.00	£47.12	-14
Battle Strikers Tournament Set	£31.00	£27.72	-11
TOTAL	£183.00	£133.03	-27

Source: Post Office. Data relates to exchange rates on 16 November 2009. UK prices sourced from Hamleys, Regent Street; New York prices sourced from Toys “R” Us, Broadway. Toys selected from Hamleys Top Ten 2009 (www.toyshopuk.co.uk/awards/christmas-predictions.php)

4 Post Office 2009 men’s gifts comparison in London and New York:

Item	London	New York	% price difference
Abercrombie & Fitch ‘Cold River’ shirt	£70.00	£22.92	-67
Levi’s 501 original jeans	£60.00	£31.51	-47
Ray Ban ‘Wayfarer’ sunglasses	£120.00	£89.41	-25
Calvin Klein ‘Pro Stretch’ underwear	£20.00	£15.28	-24
Armani ‘Black Code’ eau de toilette 50ml	£42.00	£36.39	-13
TOTAL	£312.00	£195.51	-37

Source: Post Office. Data relates to exchange rates on 16 November 2009. UK prices sourced from Levi’s, Abercrombie & Fitch, Harrods, Selfridges and Calvin Klein. New York prices sourced from Levi’s, Abercrombie & Fitch, Emporio Armani, Bloomingdales, and Calvin Klein.

5 Post Office 2009 women’s gifts comparison in London and New York:

Item	London	New York	% price difference
True Religion ‘Becky’ jeans	£220.00	£119.21	-46
Abercrombie & Fitch 'Cassandra' hoodie	£60.00	£38.19	-36
Ugg 'Classic Short' boots	£150.00	£96.76	-35
Marc Jacobs ‘Daisy’ eau de parfum 50ml	£42.09	£39.32	-7
Nars ‘The Multiple’ make-up	£27.00	£25.64	-5
TOTAL	£499.09	£319.12	-36

Source: Post Office. Data relates to exchange rates on 16 November 2009. UK prices sourced from Selfridges, Abercrombie & Fitch, Office and John Lewis. New York prices sourced from Bloomingdales, Abercrombie & Fitch, Ugg and Sephora.

6 The duty free allowance for UK citizens travelling from the USA to the UK has risen from £145 last year to £340 (effective from January 2009), including allowances for perfume, alcohol and cigarettes.  Sales tax in the New York City stores quoted is 8.875 per cent (state and city tax).  Clothing and shoes costing up to $110 are zero-rated for sales tax.  Some stores offer UK shoppers an International Savings Card, which provides an 11 per cent discount, to counteract the tax.

About First Rate Foreign Exchange Services:

First Rate is the UK’s leading provider of foreign currency services supplying over 11,500 retail outlets with a foreign currency service. It is the UK’s biggest foreign currency notes supplier and Europe’s major provider of traveller’s cheques and in the top five globally. First Rate sources currency through its associate business unit Bank of Ireland First Currency Services, one of the world’s leading wholesale currency operations.

First Rate can provide UK retailers and businesses with the following foreign currency services:

• Travel Money Online – a service enabling the ordering of foreign currency notes and traveller’s cheques securely via First Rate’s white label internet application
• Bulk provision of currency for currency retailers
• End-to-end consumer order processing – totally outsourced, white label currency solutions for phone, internet or retail outlet order placement

To find out more visit www.firstrate.co.uk.

About Virgin Holidays:

Virgin Holidays is the UK’s leading Worldwide Holiday Company with adventures to the USA, the Caribbean, Africa, the Middle and Far East, the Indian Ocean and Australasia.  Prices start from £859 for a Thailand adventure or from £699 for a seven night Mickey break Stateside.

To find out more visit www.virginholidays.com

 

For further information, please contact:

Four Countries Communications
Ruth Barker
Tel: 0207 749 9219
Mobile: 07814 571128
Email: ruth@fourcountries.co.uk

Bank of Ireland UK Financial Services
Sandra Grandison
Tel: 0203 201 6509
Mobile: 07912 298013
Email: sandra.grandison@boiuk.com

First Rate Exchange Services Ltd is registered in the UK and Supervised by HM Revenue & Customs for Money Service Business (MSB): License number 12133160. First Rate is a joint venture between The Governor and Company of the Bank of Ireland (Registered in Ireland and passported into the UK for regulatory purposes) and the Post Office^® Ltd. The Bank of Ireland is authorised by the Irish Financial Regulator and the Financial Services Authority for the conduct of business in the UK. Bank of Ireland First Currency Services is a division of The Governor and Company of the Bank of Ireland.