The “Future of British Luxury” Summit organised by Walpole on February 5th was the occasion for Jacques Stern, Global Blue President & CEO, to present the United Kingdom (UK) Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More performance in 2018.

The UK registered £3.4 billion worth of Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More transactions in 2018, the second largest market in Europe after France. The Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More market in the UK has progressed faster than Continental Europe for the last 5 years to register a +6.3% increase of its sales in store (SIS) since 2013. In the UK, globe shoppers will spend £1,850 on average, very close to France’s own average spendRefers to average value of a transaction (usually applying t... More at £1,870.

A luxury driven market

The British Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More market is driven by the luxury category. Together with France, it is the only European country where Elite and Frequent globe shoppers combined represent almost half of total sales with Elite travellers presenting a higher total sales percentage than their Frequent counterparts.

And it shows. In 2018, the luxury category performed better than the premium or lifestyle fashion categories to represent 65% of total TFS SIS in 2018. The category was also less impacted by Brexit sales slowdown, marking a -5% decrease compared to 2017, when lifestyle and premium sales haltered their growth to mark a -9% and -14% decrease respectively. More particularly, luxury transactions over £5,000 were less affected and only post a -2% decrease. Overall, since 2013, the British TFS luxury segment has shown the strongest progression out of all segment analysed.

A very British habit

Upon closer look there is also a clear location favoured for luxury shopping: department stores. In 2018, if 42% of luxury goods sales were made in department stores, average spendRefers to average value of a transaction (usually applying t... More is significantly higher when shopping luxury in department stores rather than in downtown locations, £3,000 and £2,000 respectively.

A unique nationality mix

Like the rest of European countries, Chinese shoppers hold on to the biggest share of total Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More spend in the UK. Yet, the UK 2nd most important group of globe shoppers, Gulf Countries citizens, accounts for more than a quarter of total TFS spend. In 2018, Gulf countries travellers were the most performant group of Elite shoppers both in terms of TFS SIS progression and share. Another notable progression is Americans’ access to Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More. After Chinese, they mark the strongest SIS progression over the past 5 years, +19% as well as over the last quarter, +9%.

What next?

To further enhance the UK as a key shopping destination, the country should follow in the steps of Portugal, Italy and more recently Spain, by implementing a digital process to smooth Tax Free ShoppingA number of countries offer VAT/GST refunds to international... More procedures, particularly in the airports.
Finally, Brexit will no doubt have an impact on border crossing processes. Although today many Elite & Frequent travellers visiting both mainland Europe and the UK already require two Visas, it will be important to seek ways to provide them with easy access to Visa papers and ensure prosperity for the British retail scene. This is especially important considering these categories of travellers are the key ones for the luxury market.