UK retailers are suffering as new European visa rules deter Chinese shoppers.
Global Blue, the tax-free shopping services company, said the number of Chinese shoppers in British stores slumped 30 per cent last month, leading to an overall decline of 21 per cent in the first three months of 2016.
"We are experiencing a decline in Chinese spend this year, with the UK being particularly hit following the introduction of Schengen biometric visa requirements for Chinese travellers ... and in the associations with the terrorist attacks on Europe," Gordon Clark, managing director of the UK and Ireland at Global Blue, said.
While Britain isn't part of the Schengen area which enables borderless travel between 26 European countries, last year it announced a partnership with Belgium to allow Chinese travel permits for Britain and Schengen states to be processed in the same centre.
Previously, Chinese tourists had to go through a separate visa application process for Britain.
Biometric information collection procedures, such as fingerprint scanning, were introduced for visa applications to Schengen countries in October 2015. Around 22 per cent of Chinese travellers said the ease of obtaining a visa was an important consideration, according to Global Blue.
Terror attacks in Paris and Berlin also played a role, with 56 per cent of respondents citing a safe and secure environment as an important destination factor.
"However, this is the first decline we are seeing following years of continual growth and China still drives the highest number of tax free sales in our stores," Clark added.