The European tax-free market continues to increase month-on-month with sales remaining at near-record highs compared to before the pandemic, integrated software, payment, and technology solution provider Planet has revealed.
Planet data from April shows that, despite a holiday-related pause from Gulf nations over the Ramadan period, consumer appetite for tax-free goods is driving strong growth for European retailers.
The United States maintained its position in first place with a share of 19.8 per cent of all tax-free spending, followed by China with 12 per cent.
US spending increased in April and is now double what it was in February this year. Shoppers from the world’s largest economy were the driving force behind the recovery of European tax-free shops last year and their spending continues at pace, far above the levels seen in 2019. Sales to US customers for the year to date are now 85 per cent above pre-pandemic levels and 74 per cent higher than they were during the same period last year.
US shoppers continue to dominate in France, Italy and Spain where they are the leading source market for retailers, spending around €1,150 per transaction. And France continues to be the top destination for US shoppers, accounting for 52.5 per cent of all US spending across Europe, with Italy second taking a 25.2 per cent share.
Chinese shoppers drive tax-free growth
Planet also revealed that tourists from Asia now account for 40 per cent of all sales in-store (SIS) across Europe.
Planet data shows that Chinese shoppers spent 12 per cent more in European tax-free stores in April 2023 than the month before – spending an average of €1,366 per transaction. Only nationals from Hong Kong and Singapore spent more per average transaction than shoppers from mainland China.
With Chinese spending still 72 per cent below where it was before the pandemic though, the data once again highlights the huge potential as demand is expected to increase during the year.
Just over half (55 per cent) of Chinese spending now goes directly to France, with this increasing from 29 per cent compared to the same period in 2022. Italy is currently second with an 18 per cent share of spend.
The average age of Chinese shoppers has increased substantially over the past 12 months. While Gen Z accounted for roughly 40 per cent of sales in April 2022, that number dropped to only ten per cent a year. Meanwhile, Gen Y jumped from 44 per cent to 66 per cent during the same period.
‘In the UK, the time to act and deliver is now’
Luca Cassina, president of retail at Planet, commented on the need for the UK to reintroduce tax-free shopping to ensure it can keep up with global demand: “As a global business serving retailers across many European markets, we’re delighted to see continued strong growth in their tax-free sales. But at the same time, our data highlights the need to put UK retailers back on a level playing field with their European counterparts through the reintroduction of the tax-free scheme. We know that UK retailers would also welcome the revenue boost that these high-spending visitors would deliver.
“We’d love to see international shoppers able to have a full choice of where they do their tax-free shopping when they come to Europe, and with such a strong business case already made to re-introduce the scheme in the UK, the time to act and deliver is now. We continue to work in partnership with the industry to encourage a change of thinking.”