Brexit, an Opportunity Worth at Least €2.6 Billion for European Retailers
In its latest quarterly ‘Observatory’ report, Global Blue (NYSE:GB) has examined the potential impact of recent changes to Tax Free Shopping legislation in the UK on international shopper behaviour in Europe. The report includes findings of surveys amongst international shoppers1 and UK travellers2.
With the gradual reopening of UK borders and their new eligibility to shop Tax Free in the EU, UK residents represent a new opportunity for European retailers
With the reopening of the UK borders planned after 17th May 2021, UK tourists are eager to return to travel and spending in Europe.
For summer 2021, their preferred destinations are influenced by sanitary conditions in relation to Covid-19, and are expected4 to be:
-
Spain (
30% ), + 12pt vs 2019 -
Greece (
11% ), + 7pt vs 2019 -
Italy (
9% ), + 4pt vs 2019 -
Portugal (
9% ), +5pt vs 2019 -
France (
6% ), -5pt vs 2019
However, preferred destinations are likely to evolve now that the UK Government’s ‘red, amber and green lists' are now official. Portugal is on the green list, while Spain, Greece, Italy and France remain on the amber one.
As of 1st January 2021, UK tourists are no longer considered as residents of the EU and are therefore now eligible for Tax Free Shopping in European stores. With British tourists taking around 70 million trips to Europe in 2019 and representing a total spend of around
Currently, only
Continental European shopping destinations will attract more international shoppers following the abolition of the Tax Free Shopping scheme in the UK
A survey of 45,000 international shoppers by Global Blue showed that following the UK’s abolition of Tax Free Shopping on 1st January 2021,
Overall, international shoppers are expected to reallocate at least
Mathieu Grac, VP Intelligence at Global Blue comment: “The new rules resulting from Brexit and the abolition of the Tax Free Shopping scheme in the UK have created a large opportunity for EU retailers to capture more business from international shoppers in the coming years. To realise this potential, it is important for the Europe’s retailers to understand the profiles of the new shoppers that will be coming into their stores and ensure that they can cater to their specific set of expectations.”
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1 Based on a survey at the end of 2020 of ~45,000 international shoppers who have shopped in the UK since Sept. 2018
2 Survey carried out in April 2021. 500+ answers collected from external panel of UK travellers and Global Blue’s database of UK shoppers
3 Affluent tourists are defined as those with a shopping budget of more than
4 Based on traveller assumption in April 2021
5 Global Blue and consulting firm estimates
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