In the last seven years, i.e. from 2011 to 2018, Tax Free Shopping has been one of the main growth drivers of the sector in Europe Luxury, doubling its volume. È what emerges from the data Global blue, a leading company in Tax Free Shopping services, which, on the occasion of the traditional appointment with theAltagamma Observatory 2018, traced the main market trends in the first nine months of 2018. The data actually shows that in 2018 the market is down, but the trend is for a new increase in the years to come.
Indeed, in the first nine months of 2018, Europe recorded a drop in tax free sales (-6%) compared to the same period of 2017. The main cause of this contraction is linked to the strengthening of the euro against other currencies, especially the dollar and the Chinese renminbi, started already last year. Against the lower number of transactions, Global Blue data recorded, however, an increase in the value of the average European receipt equal to 2%.
In particular, from January 2018 to September 2018, Tax Free Shopping has slowed down Italy (-8%), Great Britain (-8%), Spain (-8%) e Germany (-13%). In contrast the France, the only European country in which, in the first nine months of 2018 compared to the same period of the previous year, tax free sales recorded a positive sign (+1%) thanks above all to the purchases of Globe Shoppers belonging to the “Elite” (2,2%) and “Frequent” (17,7%) less sensitive to currency fluctuations.
However, Global Blue data highlights another trend aimed at increasing in the years to come: in 2017 i "Millennials” were the main proponents of the increase in French Tax Free Shopping. With an age between 18 and 34 years represent the 31% of the total Globe Shoppers with a purchasing power that in 2017 recorded a +17% on 2016. And the data that emerged in 2017 are an example of this: approx 1.700 euros (+10% vs 2016)the annual tax-free expenditure of Millennials belonging to the "Infrequent" category exceeds i 4.000 €(+17% vs 2016) that of the "Frequent" to reach over i 51.000 euros (+10% vs 2016) of the "Elite" category. Finally, for these tourists, who represent the first generation to have grown up with the Internet and smartphones, the possibility of having a personalized and "digital" shopping experience is essential.
Going into the details of the nationalities, spending in the first nine months of 2018 by Chinese Globe Shoppers, albeit slightly down (-4% compared to 2017), remains the protagonist of Tax Free Shopping with 29% of the total of purchases made in Europe. The Old Continent continues to be a shopping destination also for travelers from Gulf countries (11% of total tax free sales), and for those arriving from Russia (8% of total tax free sales).
Global Blue data shows that in the period January-September 2018 the main nationalities, with the exception of Russian tourists, mainly preferred France as a travel destination compared to other countries traditionally considered "shopping destinations". The purchases of the Chinese Globe Shoppers they fell especially in the UK (-8%), as well as those of Americans (-8%); on the other hand, it is Italy that suffers the most from the slowdown in shopping by travelers from the Middle East (-16%). Forecasts for the next three months confirm this downward trend with the exception of the UK and Spain.
With the aim of analyzing the purchasing dynamics of non-EU tourists, also in 2018 Global Blue and Bain & Company have focused their mutual expertise to determine the evolution of tax free transactions in the three main reference segments: “Luxury","Premium"and "Mass”. In the first nine months of this year, in line with the arrival dynamics and the profiles of the Globe Shoppers, there was a decline in the "Luxury" (-8%) and "Premium" (-10%) segments, while the “Mass” is unchanged from last year.
“After a positive 2017 – he commented Pier Francesco Nervini, Chief Operating Officer North & Central Europe & Global Accounts Global Blue –, the first nine months of 2018 saw a slowdown (-6%) in the European Tax Free Shopping market. The phenomenon, largely expected, is mainly attributable to the appreciation of the euro against the main currencies. However, the increase in the average transaction in the same period is interesting, which confirms the lower elasticity to the exchange rate on the part of buyers with higher budgets. I would like to underline that, despite the not positive 2018, we are still on values higher than 2016 and that the Tax Free is confirmed as one of the main growth levers of the luxury sector".
