Government urged to reinstate Tax Free shopping with UK Retailers missing out as sales surge across Europe
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The European retail sector has enjoyed its best month for international spending on Tax Free goods since the end of the pandemic after sales surged by 40% month on month in March 2023, taking them to just 21% below March 2019 – their highest level in nearly three years.
That’s according to the findings from Planet, a global technology leader providing integrated software, payment, and technology solutions.
Planet’s latest data shows the extent to which Europe’s retailers are benefiting from a surge in sales as the ever-growing numbers of Asian tourists combine with continued high levels of spending by US consumers, fuelling strong growth.
This further highlights the need for the UK Government to quickly reintroduce Tax Free shopping so UK retailers can benefit from this growth opportunity.
UK consumers continue to spend big on Tax Free across Europe
The UK’s shoppers are continuing to flex their spending muscle in Europe, retaining their place among the top five source nationalities for Europe’s retailers when it comes to Tax Free shopping despite the growth from Asia. As European retailers gear-up for the busy summer travel season, the presence of UK shoppers will continue to provide good cheer.
Planet’s latest Intelligence report shows that in March 2023, UK consumers spent most on Tax Free products in France which captured 56.9% of all spending across Europe with an average transaction value (ATV) of €1,870. Paris remains the preferred city destination taking 46.1% of all UK consumer spending.
The UK’s younger customers are continuing to drive this spending with Gen Z accounting for 27% of sales in March 2023, almost three times more than other non-EU Gen Z shoppers. The UK’s affluent Gen Zs prefer to spend in luxury, department stores, and watches & jewellery where they over-index compared to other non-EU shoppers of this age group.
Luca Cassina, President of Retail at Planet commented:
“Our data highlights the extent to which UK retailers are missing out on international spending particularly from Asian, Middle Eastern and US tourists with the UK being the only major European market not to currently offer Tax Free shopping.
“We know that Chinese tourists are already returning to Europe and they’re now only second to the US in terms of their spending on Tax Free. All the forecasts point to them emerging as a major force in international spending across Europe this summer as international airline capacity from mainland China continues to increase.
“We know from our research that almost 7 out of 10 Chinese consumers would be more likely to visit the UK if a Tax-Free shopping scheme were to be available.
“We continue to encourage the UK Government to act quickly to reinstate a Tax-Free shopping scheme for overseas visitors. This would provide a major and very welcome boost to the UK’s retail sector ahead of the peak summer travel season.”
“By working in partnership with the industry, the UK Government can quickly introduce a digital Tax-Free shopping scheme that would offer overseas consumers visiting Europe more choice and which puts retailers across the UK on a level playing field.”