INTERNATIONAL. Global tax free shopping year-on-year sales growth has slowed again in January to just +3%.
Despite being the 18th consecutive month of sales growth, it is the weakest gain seen since August 2014, according to retail intelligence company Global Blue’s statistics. It follows a +11% increase in December, itself a slowdown compared to previous months.
The weak January performance was largely attributable to softer Chinese global spending, which slowed to +11% year-on-year. A significant trend identified by Global Blue was that while tax free shopping spending in Asia rose sharply to +42% in January, it decreased by -13% in Europe – the first time Chinese spend has declined there since May 2014.
Global Blue said the behavioural shift was largely down to concerns over terrorist attacks in Europe. New biometric visa requirements for Chinese entering Europe are also impacting the number of travellers from the country visiting the region.
The shift has contributed to an overall +37% year-on-year growth in Asia Pacific, with Russia’s weak currency also attracting Chinese tourists.
Japan is a “hotspot” in Asia for growth, according to the analyst. It is now the fourth largest tax free shopping destination, Global Blue said, with sales up +42% in January, and Chinese spending there up +87%.
While Chinese shoppers remain the number one nationality by share of global spend for tax free shopping, Americans (who are fifth largest) registered a much bigger sales growth with +36% in January.
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Spending in Europe fell -3%, the first decrease since the beginning of 2015. The poor performance was driven by declining number of transactions (-7%) and slightly less than flat average spend (-1%).
All countries in Europe saw a slowdown in tax free shopping growth in January, with France decreasing -21% compared to -8% in December. The Paris terrorist attacks are still affecting tourism numbers and tax free shopping performance, Global Blue said.
Spend in Germany declined -17%, but Spain bucked the general trend by posting a +22% increase, driven by “South American and Hispanic nationalities shopping tax free while they are in Europe”.
The UK edged above France to become the number one tax free shopping destination in January in terms of share of global spend. However, sales were down -11% in the UK, “reflecting the problematic strength of the British pound,” Global Blue noted. Middle East nationalities now have a greater share of spend in the country than do the Chinese.
Italy was the third biggest tax free shopping destination globally in January and, with +7% increase in sales, was the only European country in the top five to show positive growth.
