Foreigners' Spending Boosts U.S. Retailers

Stores in search of big spenders are looking for them overseas.

By SHARE

With U.S. consumers tightening their belts, retailers are reaching out to European and Asian shoppers.

Jewelry retailer Blue Nile announced this week that it will begin offering international shipping to 12 new countries in Europe and Asia. Wal-Mart recently said it was investing millions of dollars in its E-commerce technology to boost its capacity to sell overseas. And women's clothing retailer Anthropologie announced that it will soon launch international shipping from its website.

The changes reflect the fact that in contrast to weak consumer spending at home, retailers have been enjoying strong sales growth from foreigners. Tiffany reported that over the holiday period, retail sales grew 4 percent domestically compared with 18 percent internationally. It also attributed much of its holiday sales growth in its flagship New York store to foreign tourists. Similarly, Amazon recently reported that its fourth-quarter international sales rose 46 percent, compared with 40 percent growth in the United States and Canada.

The trend is apparent at discount stores as well: December Wal-Mart sales at home grew 5.6 percent over the previous December, while international sales grew 18 percent, according to an analysis by Wall Street Strategies.

"With the world developing and the weak dollar, there is increasingly demand overseas for great American products," says Mark Vadon, chief executive of Blue Nile. "There's disposable income that was never there before."

At Blue Nile, international sales grew 100 percent in 2007 to $17.2 million—still a relatively small part of the $320 million-a-year business but one that Vadon thinks will grow. "A decade out, the international part of the business will be tremendous," he says. "Maybe it will be longer than a decade, but there's a point where the international [side] will be the majority of the business."