Harrolds founder John Poulakis estimates as much as a fifth of sales from his boutique department store come from tourists, and the numbers are swelling every year.
Fashion-savvy visitors from as far afield as the Middle East are regular visitors to the Harrolds shops in Sydney, Melbourne and the Gold Coast, along with Asian holidaymakers stocking up on the latest looks from fashion powerhouses such as Givenchy, Kenzo and Valentino.
More BusinessDay Videos
- Video duration
- 01:50
Tourists boost retail sales
Tourists boost retail sales
Growth in tourist numbers have provided a much-needed boost in the increasingly competitive retail industry. (Courtesy ABC News 24)
Up Next
Oil price tumbles
- Video duration
- 02:49
- Video duration
- 02:49
Oil price tumbles
Oil price tumbles
The slump in oil prices extends to a fourth day with prices dropping below $US50 a barrel.
Up Next
Tesla batteries: Australia's energy future?
- Video duration
- 01:09
- Video duration
- 01:09
Tesla batteries: Australia's energy ...
Tesla batteries: Australia's energy future?
The company's battery boss says SA's power woes can be solved in 100 days while launching Powerwall 2 units for households in Australia.
Up Next
Trump rally? No, it's Gregorian
- Video duration
- 02:07
- Video duration
- 02:07
Trump rally? No, it's Gregorian
Trump rally? No, it's Gregorian
Think the market is having a Trump rally? Maybe we're just in the middle of the Australian stock market sweet spot. Michael Pascoe comments.
Up Next
Bank's long list of breaches
- Video duration
- 02:23
- Video duration
- 02:23
Bank's long list of breaches
Bank's long list of breaches
Westpac's CEO Brian Hartzer responds to questions about the number of ASIC investigations into the bank.
Up Next
Bank boss rejects naming and shaming
- Video duration
- 01:46
- Video duration
- 01:46
Bank boss rejects naming and shaming
Bank boss rejects naming and shaming
The head of the Commonwealth Bank has rejected any suggestion the identity of senior executives who oversaw scandals within the bank should be revealed.
Up Next
Achieving gender equality
- Video duration
- 01:32
- Video duration
- 01:32
Achieving gender equality
Achieving gender equality
Former Sex Discrimination Commissioner Elizabeth Broderick and Unilever's Clive Stiff discuss how businesses can achieve gender equality. (Vision courtesy Unilever)
Tourists boost retail sales
Growth in tourist numbers have provided a much-needed boost in the increasingly competitive retail industry. (Courtesy ABC News 24)
Harrolds' loyal, local shoppers still dominate sales, which have grown at a "double-digit rate" for the past five years according to Mr Poulakis, but he said the tourist market had grown considerably in recent years.
"We have a wide array of international people who shop with us," he said.
"We see a lot more Chinese than we used to five years ago but it doesn't stop there, we see a lot of New Zealanders too, as well as people from the Arab states."
The rise of overseas shoppers in Australia's major capital cities is providing a much-needed boost to retail sales, which Deloitte Access Economics claims are weighed down by stagnant wages growth and high household debt in its latest Retail Forecasts report, Year of the Tourist.
A Partner at Deloitte, David Rumbens, said the number of foreign tourists visiting Australia was at record highs and spending was rapidly increasing as well.
"During the 2015-16 financial year, tourist expenditure totalled around $130 billion, retail spending accounted for around 39.7 per cent of this expenditure, including $36.1 billion on food retailing and $15.6 billion on non-food retailing," Mr Rumbens said.
The China-led expansion of overseas visitors to Australia is benefiting high-end fashion boutiques and beauty brands but it comes with a warning.
Mr Rumbens said tourism was providing the retail sector with a "big boost" but the influx of tourists was also likely to bring more international retailers to Australia's shores.
Only 39 of the world's top 250 retailers are trading in Australia.
"While tourism adds a key supplementary market to Australia's retailers, it also exacerbates their vulnerability to international competition," Mr Rumbens said.
The China-led expansion of international visitors to Australia is benefiting high end fashion boutiques as well as beauty brands but it comes with a warning as well.
"As more tourists arrive onshore, more international retailers want to come along for the ride as well."
Deloitte points to the global apparel giants to help explain the pressure on parts of Australia's apparel market, which has been hit with a slew of retail collapses since December, including Payless Shoes, Pumpkin Patch, Marcs and Herringbone.
Mr Rumbens said apparel turnover was growing more rapidly than any other retail category but the factors driving this expansion were weighing on the mid-section of the market.
He said online retailing as well as the international fast-fashion chains had spurred spending but in some cases that had taken sales away from established brands like David Lawrence and Rhodes and Beckett.
"This indicates that category growth is not the only precursor to retail success," Mr Rumbens said.
And retail returns are also under pressure, with Deloitte's  report revealing retail profits slumped to the lowest level in five years in the past six months.
The rapid rise in house prices in Sydney and Melbourne is also likely to be contributing to apparel sales as young people give up on the dream of home ownership and instead put that money into discretionary purchases.
But Mr Rumbens said the stockmarket was also performing quite well and companies were increasingly paying out dividends to shareholders, which had a wealth effect for investors.
Deloitte is forecasting a "steady improvement" in retail sales through 2017 and expects it to coincide with a modest improvement in jobs growth during the same period.