On January 29th, during an exclusive conference gathering stakeholders from the Luxury and Fashion industries, Mathieu Grac, Global Blue VP Intelligence Strategy, and Yan Mortreux, Global Blue France Managing Director, unveiled France A number of countries offer VAT/GST refunds to international... More (TFS) performance for the year of 2018 and discussed the key drivers that will perpetuate this performance into 2019 and the years ahead.
The French exception
After a brief slowdown in 2016, Europe is on the mend and posts a +6% increase of its TFS sales in store (SIS) registered over the past 5 years. Out of all the European countries observed, France is leading the way and posts a stronger +8% increase over the same period. These results are a combination of different factors.
In 2018, France is where tourists chose to spend the most, 2,148€ on average. It is the #1 country of spend in Europe, while the region averages 1,633€ of spend per visitor. Indeed, despite a rather tumultuous end of the year for French retailers which saw their store activity slowdown dramatically, the Refers to average value of a transaction (usually applying t... More in store continued to grow steadily during the entire year.
France is also the only European country to register positive TFS growth out of the top 3 nationalities visiting Europe. Americans post the highest TFS SIS growth compared to the previous year, + 14%, before Gulf Countries citizens at +5% and +2% for Chinese. On the same level, on the back of more favourable currency exchange rates, Americans have more than doubled their use of TFS since 2013, the strongest progression out of all visiting tourists observed.
France still holds on to its status as the fashion capital of the world. High luxury transactions are driving the TFS performance of the country. Transactions of 5,000€ or above have risen across all categories in 2018: +12% for the Handbags and Leather goods category, +5% concerning Watch and Jewellery (W&J) and +3% for Fashion.
Another key driver explaining France’s results in 2018, and for the years ahead is Millennials’ spending potential. If their Refers to average value of a transaction (usually applying t... More is still a little below their elders’ at 1,852€, already in 2018, they are growing the fastest in terms of number of globe shoppers in the region at +10%. Their average TFS spend follows a similar ascending curve, +15%. In comparison globe shoppers who are more than 45 years old are decreasing their TFS spend.
Global Blue expects France 1st term TFS results of 2019 to be like end of 2018, between -4% and -2% decline of transaction number. For the years ahead, France can already count on these levers to perpetuate positive TFS results: Americans’ comeback in the country, a strong high luxury offer and millennials’ rising spending potential.