INTERNATIONAL. Tax free shopping specialist Global Blue has reported a sharp decline in November sales in Asia, and a flat performance in Europe.

In Asia, Tax Free Shopping (TFS) sales fell by -7% year-on-year, driven by a -6% decline in average spend. It cited “negative macroeconomic factors” which meant a “less than positive trading environment” across key markets.

Global Blue noted: “November is usually a quiet period for Asian travel and TFS sales performance reflected this. The Japanese Yen softened in line with global markets, helping TFS sales growth within the country.

“Although Sales in Store (SiS) were down by -8% on October’s figures, the volume of tax free transactions increased by +11% as FX movement made the destination more desirable to overseas shoppers.”

For Chinese “globe shoppers”, noted Global Blue, the recent Yuan devaluation meant shopping has become less affordable. While transactions were up by +4%, this was offset by a -4% drop in average spend.

November also saw growth in Chinese air arrivals slow for the first time this year. Domestically, the slowdown of the economy, combined with an effort from Chinese policy makers to bring retail business back to China, has further reduced appetite for foreign purchases and dragged down TFS sales performance, added Global Blue.

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From other nationalities, Global Blue has seen the biggest sales declines from Hong Kong (down -33%) and Taiwan (-22%), closely following trends for October.

However, Japan posted growth of +15% as the strong Yen gave Japanese globe shoppers extra purchasing power when travelling within the region.

Flat sales in Europe

Tax Free Shopping sales performance remained stable in Europe for a second consecutive month, at 0% for November year-on-year.

Global Blue noted: “Against the TFS sales decline seen across Europe since January, this continued stabilisation of performance can be explained by an easing of the macroeconomic conditions impacting the luxury industry. These included the softening of the Chinese economy and the lingering impact of European terror attacks earlier this year. This stabilisation is particularly encouraging in light of the strong base of comparison from November 2015.” 

November saw European transaction trends continue to improve across most nationalities, with Russian and US sales increasing by +3% and +2% respectively in the month to date measured. Improvement in the number of Tax Free Shopping transactions continued (-2% vs -5% in October), while the average spend per transaction remained positive for the third consecutive month.

The strengthening of the US Dollar, an increase of Brent oil prices during November and improving consumer confidence in China meant Europe shows improvement across its three largest origin nationalities.

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With the stabilisation of the Russian economy and strengthening of the country’s position on the world stage the revival of the Rouble continues, meaning November also saw Russian TFS spend grow.

The UK saw strong growth in November, with sales up by +43% as the softening of the Pound continues post-Brexit. This growth was driven by both increased transactions (+16%) and a significant rise in average spend (+24%) as globe shoppers come to London.

The UK’s performance is largely attributed to consistent spend from Asian nations where demand is returning following a “tumultuous” 2015 in domestic markets, impacted by the economic slowdown in China.

Chinese visitors continued to dominate the total monthly share of UK international shopping spend, accounting for 25% of the market, up +63% on the same period last year.

The volume of transactions continued to improve across all other major TFS destinations, with the exception of Italy, where a decline in Russian and Chinese visitors has slightly decreased the number of transactions (-11% YoY vs. -9% YoY for November).