Landscape of luxury duty-free shopping in Europe transformed by new trends

Luxury tourist purchases in Europe in the next few months will be strongly impacted by several emerging trends, according to a study by duty-free shopping specialist Global Blue. Among the most significant trends, a substantial comeback by Russian jet-setters, a slow-down in the German market, a waning of the UK’s appeal and, most astonishingly, a lessening of the impact of terrorist attacks. 


France is the largest duty-free market in Europe, with a 22% share of the business - hotels-roissy.fr

Between January and the end of September 2017, luxury goods purchases by tourists in Europe grew 11%, the highest increase being posted by Spain (+18%). "The terrorist attacks which struck Catalonia in August had zero impact on duty free sales. Contrary to what happened in Paris in November 2015, the Barcelona attacks were metabolised by tourists within two weeks, clearly showing the system's ability to adapt even to this kind of extreme situation. It is the first time that we observe such a phenomenon," said Pier Francesco Nervini, Operations Director for central and northern Europe for Global Blue, speaking at the presentation of the company's latest report.

Nervini also underlined how 2017 was "extraordinary" in comparison to the previous year. This was due to an increase both in the number of tourists and in their spending power - average sales receipts were up 3% - and also to positive macroeconomic figures in the countries tourists mainly hail from.

Tourists from all nations have increased their luxury goods expenditure in Europe, with the exception of those from the Middle East, due to political and economic factors. The leading country is still China, whose tourists maintain the lion's share of luxury goods purchases in Europe, with 28%. Their expenditure grew 15% in the period, with significant differences in behaviour within the cluster. Average expenditure ranged in fact from €1,500 for the less dedicated travellers, who account for 92% of Chinese tourists, to €15,000 for 'elite' travellers, the top 1% of Chinese tourists.

Duty free purchases by Russian tourists accounted for 9% of the market, but leaped 24% in the period. Truly a big comeback for this country on the European scene, especially in Italy and France, driven by rising oil prices. "In the last 15 years, we noted a perfect correlation between oil price trends and the rouble's evolution," said Pier Francesco Nervini. At the same time, tax-free purchases by American tourists rose 19%, thanks to a favourable exchange rate.

The study by Global Blue focused chiefly on four countries, Italy, France, the UK and Germany, which altogether accounted for 84% of duty-free expenditure in Europe. Luxury goods purchases in France and Italy grew respectively by 7% and 8%, while the UK, benefiting from a Brexit effect, recorded the highest increase (+22%), ahead of Spain (+18%).

"Until July, growth was chiefly concentrated at retailers like department stores, which performed much better than other high street stores," said Nervini, who nevertheless envisaged a lessening of the Brexit effect. In the last quarter, duty-free purchases in the UK fell by 3%, and are expected to decrease by another 1% in the next three months.

Germany instead suffered a remarkable 4% decrease in the first nine months of the year. Once the favourite destination of Chinese shoppers hunting for luxury labels, having attracted from the early days a spate of retailers and chains in its major hub airports, Germany is now penalised by competition from other European airports and by the slow-down of its airline traffic.

"Germany no longer enjoys its previous, seemingly unjustified competitive position, and is expected to slow down even further, with another 3% downturn forecast for the coming months, to eventually settle on market share that is appropriate to it," concluded Pier Francesco Nervini.
 

Translated by Nicola Mira

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