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 shoppersFrequent Globe Shoppers is a term coined by Global Blue to d... More 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%.

Going TFS forward

With the Brexit just around the corner, important changes are to be expected around border crossing. With regards to TFS, Global Blue predicts that 70% of Elite and Frequent shoppers will need a second Visa to enter the British territory. Considering these shoppers’ spending power, facilitating their access to these papers is crucial to ensure the British retail category maintains its activity. 

Much like Portugal, Italy or more recently Spain, a smooth TFS process supported by digital validation will incite shopping expenditure.