Global Blue’s European Tax Free Shopping (TFS) sales performance continued to improve in February thanks to strong growth from most leading globe shopper nationalities.
European TFS experienced double-digit growth during January and February, with calendar year to date sales increasing +22%, thanks to a recovery of the European tourism market in the first two months of 2017.
Leading market recovery continues
The resurgence of France as a TFS destination continued, with calendar year to date sales-in-store in positive growth for a third consecutive month.
UK performance remains strong (+50%) despite many British retailers adjusting prices to compensate for the weak pound. Unlike other European markets, where performance was driven by transaction growth, the UK saw growth in average spend, up +14% by the end of February (calendar year to date).
Leading nations continue to perform
Key markets in Europe continue to recover thanks to increasing visitor numbers from Asia and the US, with analysts predicting that this trend will continue throughout 2017. This rise in visitor numbers can largely be explained by the continued economic growth of key globe shopper nations including China, US and Russia.
The first two months of the year saw growth from leading nationalities, with Chinese and American sales-in-store increasing by +36% and +32% respectively. This can be attributed to Chinese New Year and favourable exchange rates, encouraging more international travel and increasing buying power.
Russian sales-in-store continued to grow following turbulent 2016, with a calendar year to date increase of +38%. This was driven by a dramatic +43% increase in transactions as improvements to the Russian economy encourage more Russian to travel to Europe.
The Chinese New Year effect
China remained the key driver of growth in European TFS sales, with calendar year to date sales-in-store growth of +36%. The UK (+96%) was a major beneficiary of Chinese spend during January and February, while Spain (+48%) and France (+32%) also performed strongly.
Chinese spend boosts all spend intervals
Analysis of Chinese shopper behaviour reveals that this group drive significant sales growth across all spend brackets in Europe’s largest markets. Calendar year to date transaction growth from Chinese shoppers outstripped all other nations in February, from high street to luxury purchases.
Across Europe, Chinese transactions under 750EUR grew by +11% (vs +7% for all other nationalities), while luxury sales of over 5000EUR increased by +15% (vs +7%). In the UK this trend was even more pronounced, with transactions from Chinese shoppers under 750EUR up by +43% (vs +20% for all other nationalities) and luxury sales of over 5000EUR increasing +134% versus (+41% for all other nationalities).
Watches and jewellery returns to growth
Strong TFS spend during the first two months of the year gave a welcome boost to European watches and jewellery sales, up +12% year-on-year. This is this first time the category has grown in over 12 months and suggests that Europe’ s luxury sector is recovering after a challenging 2016. All other spend categories grew year-on-year during January/February, notably fashion and accessories (+31%) and department stores (+22%).
Global Blue takeouts:
• European TFS experienced double-digit growth during January and February, with calendar year to date sales increasing +22%
• Chinese New Year boosted European retail, with TFS sales-in-store from Chinese shoppers up by +36%
• Chinese transaction growth outstripped that of other nations across all spend brackets in Europe’s largest TFS markets