Planet: Gen Z is driving UK’s significant retail spending abroad post-Brexit

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British shoppers continue to be among the top five nationalities when it comes to Tax Free spending abroad, according to new findings from Planet, a global technology leader providing integrated software, payment, and technology solutions.

Planet’s latest Intelligence report shows that in February 2023, UK tourists had the highest average transaction value (ATV) of €2,740 in Portugal, outpacing other non-EU shoppers. France remains the most preferred destination for UK shoppers, however their ATV in the country remains below average.

Notably, it is the UK's younger customers driving this trend. Gen Z accounted for a staggering 29% of sales in February 2023, compared to just 8% for other non-EU shoppers. They hold over 30% of the share of spending across categories like luxury, department, and watches & jewellery stores. The data shows that Gen Z tourists from the UK are particularly interested in watches & jewellery, holding an 11% share compared to just 3% for other non-EU shoppers. 

The continued popularity of UK tourists among European retailers highlights the importance of nurturing this crucial market, particularly among younger consumers.

UK risks missing out on full spending power of the returning Chinese tourist

The data also shows how the European Tax Free shopping market is experiencing a shifting landscape, with Asian tourists making an ever more powerful impact. Chinese consumers stood out, with an average transaction value of €1,415, making them a prime target for retailers. Similarly, tourists from Taiwan have shown an impressive average transaction value of €1,368.

Meanwhile, the United States remains at the forefront with a 14.9% share of in-store sales, underlining their ongoing importance for Tax-Free shopping in Europe. However, UAE tourists have also shown significant spending power, with an average transaction value of €1,611, higher than that of both US and Asian tourists.

Despite this, the expected influx of Chinese tourists in the summer of 2023 will be a potential opportunity for change and is likely to reduce the dominance of the US as a source market. 

With the Chancellor’s recent Budget not taking the opportunity to re-introduce a Tax Free shopping scheme in the UK, the country risks missing out on the full spending power potential of the returning Chinese tourist. 

Luca Cassina, President of Retail at Planet commented:

“Despite widespread calls from the industry, we’re disappointed the recent Budget did not include the reinstatement of a Tax Free shopping scheme for overseas visitors. It’s a missed opportunity ahead of the start of the international tourist season to raise an additional £350m for the Treasury each year, and to provide a major boost to the UK’s struggling retail sector.

“As we head into the peak Summer months for international travel, the UK retail industry was hoping to benefit from the boost to international spending emanating from what’s likely to be the first restriction-free travel season in four years.

“It’s not just the full spending power of US visitors that UK retailers will continue to miss out on due to a lack of a digital Tax Free shopping scheme, but also returning high spending Chinese tourists too. 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.”

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