We use cookies to ensure that we give you the best experience on our website. By continuing to use the site, you agree to the use of cookies. You can change this and find out more by following this link

Europe update: TFS growth continues thanks to January sales

Global Blue’s European Tax Free Shopping (TFS) sales performance continued to improve in January, thanks to an increase of visitors to the region and positive macro-economic conditions driving up spend with key nationalities.

European TFS experienced a strong start to 2017, with month to date sales growth of +21% in January. This second consecutive month of growth followed a +3% increase during December 2016; the first time European TFS grew since December 2015.

January’s strong performance can be attributed to several factors. These include a healthy rise in average spend (+8%), a significant increase in transactions across all markets (+12%) and a favourable comparison to January 2016, when the slowdown of the TFS market began to take hold.

Transaction growth could be seen across all European markets as increased numbers of consumers visited the region in January. This rise can be explained in part by favourable currency trends from key markets including USA and Russia, but also by Chinese New Year falling earlier than usual, delivering a surge of Chinese visitors to the region in late January.

Transaction growth across all markets

France continued its return to growth with sales in-store up by +20% month to date (following a +21% increase in December). French performance was driven entirely by increased transactions (+20%) as visitors to the country spiked in January, while average spend remained flat at +0% month to date.

Italy and Germany both returned to growth for the first time in over 12 months, with sales in store up +11% and +5% respectively during January. Much like France, this growth can be attributed to increased visitors rather than a raise in average spend, with Italian transactions up +10% and German transactions up +3%. This rise in performance is a welcome boost to two of Europe’s largest TFS markets.

British pound remains attractive

While other key markets returned to growth, the continued softening of the British pound helped cement the UK as Europe’s most affordable luxury shopping destination. During January, month to date sales rose by an impressive +45% as large numbers of shoppers visited the UK to benefit from the weak pound.

Unlike other key European markets, where performance was driven solely by an increase in transactions, the UK also saw a sharp rise in average spend during January. The UK’s average spend increase of +15% was a key driver of the healthy growth in European TFS last month.

Key nations perform strongly

The majority of key globe shopper nationalities posted sales in-store growth in January. Last month saw particularly strong growth for Chinese globe shoppers thanks to an influx of visitors celebrating an earlier than usual Chinese New Year. This surge of inbound travellers towards the end of January saw Chinese sales in-store return to growth at +35% month to date, driven by a +23% rise in transactions.

American and Russian globe shoppers also performed strongly in January, showing significant sales in store increases of +39% and +32% respectively. This performance can be explained by a large uplift in transactions (USA +24% and Russia +37%) as domestic confidence in both countries continued to strengthen the US dollar and ruble against the euro and British pound.

Growth across all spend brackets

Analysis of spend behaviour also paints a positive picture for the European TFS market in January. Across the region’s top four TFS markets, positive transaction growth was seen across all spend brackets, from high street to luxury purchases. The volume of sales under 750EUR grew by +10% month to date, while luxury sales of over 5000EUR increased by +11%, indicating a healthy stabilisation of the TFS market across all traveller income groups.

Global Blue takeouts:

• January saw European TFS performance in positive growth for the second consecutive month (+21%), indicating a continued stabilisation of the market.

• Growth can be largely attributed to a significant increase in transactions across all markets (+12%) as visitor numbers to the region rise.

• The soft British pound continues to drive average spend growth across the region, which was up by +8% in January.