Latest Global Blue data highlighted a deceleration in tax-free shopping across Continental Europe and the Asia Pacific, with a modest 2% year-over-year growth in March. according to Stifel. This represents a significant drop from the 10% growth observed in February and the robust 29% and 21% increases seen in January and the fourth quarter of 2024, respectively.
In Continental Europe, the growth of tourist tax-free spending slowed to 7% in March from 9% in February, a downturn from the 19% growth in January and the 16% increase in the fourth quarter of 2024. While spending by U.S. tourists slowed in March, it remained strong overall.
Chinese tourist spending showed some sequential improvement but was still relatively subdued at 6% growth in March compared to a decline of 11% in February and a slight increase of 1% in January. Spending by tourists from the Gulf Cooperation Council (GCC) countries dropped to -12% in March, although a rebound is anticipated in April due to the shifting Ramadan calendar.
The Asia Pacific region saw a reversal in momentum, with tourist tax-free spending declining by 7% in March after experiencing 10% growth in February, a sharp 46% increase in January, and a 16% rise in the fourth quarter of 2024. Japan’s tax-free spending fell to -7% in March, impacted by foreign exchange fluctuations, while Singapore saw a substantial decline of 21% in March.
This overshadowed the continued strength in South Korea. Spending by Mainland Chinese tourists in the region also weakened, dropping to -1% in March from a 19% increase in February and an 87% surge in January.
The fresh data from Global Blue indicates that luxury companies may report a softening in tax-free spending, particularly for Chinese tourists in the Asia Pacific, with a weak exit rate in Japan, as well as softening trends in Europe, partially influenced by calendar effects for GCC tourists transitioning from March to April.
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