Europe’s Tax Free Shopping Gains Strength With Record Recovery Rates, says Global Blue‘s new report.
Last week, at Walpole’s latest Luxury Summit in London, Global Blue presented new data signalling the continued recovery of Tax Free Shopping in continental Europe. Global Blue offers innovative solutions in three different fields: Tax Free Shopping, Payments services, and Complementary RetailTech.
During the first few months of 2022, Tax Free Shopping recovery in continental Europe reached its highest levels since the start of the pandemic, peaking at 66% 2 in March, thanks to pent-up demand and the recovery of international air travel. Top Tax Free nationalities including the Gulf Cooperation Council Countries (GCC), US and Regional European countries continued to outperform pre-pandemic levels, reaching 175%, 119% and 106% respectively in Q1 2022.
At the Walpole British Luxury Summit in London, Global Blue CEO, Jacques Stern, will present new data that signposts the recovery of post-pandemic Tax Free Shopping in continental Europe.
Europe’s Tax Free Shopping recovery continues to make strong progress as international travel resumes.
In the early months of 2022, Tax Free Shopping in Europe has seen its highest rate of post-pandemic recovery, reaching 66% in March 2022, versus the same period in 2019.
In April, the recovery reached a slightly lower rate (56%) due to the temporary impact of Ramadan and subsequent decreased travel amongst GCC shoppers.
Shoppers from the GCC, US and European region exceed 2019 spending levels.
European recovery was fuelled by the strong performance of several top Tax Free Shopping nationalities. During Q1, GCC shoppers reached 175% recovery versus 2019, while those from the US and Regional Europe achieved 119% and 106% respectively.
Recovery rose to 155% for US shoppers and 134% for Regional shoppers in April, while it went down to 43% for GCC shoppers, due to the Ramadan period.
UK shoppers – a new nationality eligible for Tax Free Shopping since Brexit – also contributed to the improved recovery, accounting for 7% of all Tax Free Spend in Europe during April.
Tax Free Shoppers’ strong appetite to travel and spend is driving recovery.
The ongoing recovery can be attributed to several key drivers, which include:
– Strong appetite for travel: According to latest ForwardKeys5 data, air traffic demand to continental Europe is continually improving in 2022, with GCC demand reaching 72% recovery in Q2 (vs 68% in Q1) and US reaching 78% (vs 77% in Q1).
– Pent-up demand: In 2022 (versus 2019), Tax Free Shoppers have increased their number of transactions and the average spend per transaction, which has led to an overall increase in individual spend: this is pent-up demand6, which reached +137% amongst GCC shoppers, +90% amongst US shoppers and +98% amongst Regional shoppers in Q1.
“The strong performance of nationalities such as the GCC and the US is a very encouraging indication of how quickly and robustly Tax Free Shopping can recover when borders soften and international travel resumes. Meanwhile, the quick establishment of UK shoppers as a key Tax Free nationality offers promise for European retailers and we look forward to seeing the evolution of this new market throughout 2022 and beyond.” – Jacques Stern, CEO, Global Blue.