Year-on-year (YoY) sales growth of tax free shopping has slowed again – with December data showing +11% after November’s rally of +24%, according to new figures from tax free refund specialist Global Blue.

The company [whose data are based on tax refunds and not on actual duty free and travel retail sales] points to the final three months of 2015 as “the lowest quarter performance of the year”. Previous quarters, Q2 and Q3, had highs of +51% and +41% respectively.

After far healthier growth rates over the summer months, Global Blue data show Q4 growth to be mirroring that in Q1 which dropped to +7% in January. December’s growth is the third lowest rate of the year, coming shortly after October’s poor figures.

Global Blue says: “Tax free sales performance this year has seen peaks and troughs in line with currency exchange rate fluctuations and global markets turmoil.” But on a positive note, it adds: “Historic data show cumulative growth over the past two years.”

In terms of share of spend in December, the strongest performing countries were France (+14%), the UK (+13%), Italy (+12%), Germany (+12%) and Japan (+11%).  While France suffered in the wake of the Paris terrorist attacks, Italy and Germany benefitted, with increased sales of +19% and +21% YoY respectively.

CHINESE SPENDING GROWTH DROPS

Major tourist destinations also continue to benefit from the Chinese travellers. “Despite the impact of the China slowdown on Chinese globe shopper spending overseas, coupled with an immediate (but limited) decline in sales for France following the Paris attacks in November, we are still seeing strong YoY growth for the top 10 tax free shopping global shopping hot spots and nationalities.”

Growth in Chinese globe shopper spending has slowed to +16% for December, after the Q4 high of +40% in November according to Global Blue. Concerns surrounding slackening Chinese luxury spending hit share prices of luxury groups last year.

But those concerns are reducing as groups such as LVMH, Richemont and Burberry have reported a rebound in demand within the Chinese domestic market. However, how sustained that demand will be remains very uncertain given China’s weaker economic outlook.

EUROZONE SEES PARIS IMPACT

Tax free spending in Europe increased +11% YoY in December (vs +14% in November and just +1% in October) “with slowing Chinese demand for luxury goods and the negative impact on sales in France after the Paris terror attacks being probable reasons for the decline in growth” says Global Blue.

However, France was still the number one tax free shopping destination, with a 14% global share. December sales growth from Chinese globe shoppers in France was down to +9% vs +13% in November. But average spending from Chinese visitors in France went up slightly to €1,619 in December from €1,567 in November.

RUSSIAN ‘GAINS’

Russian globe shoppers are registering less negative growth month-on-month, as consumer confidence slowly returns amid economic reforms, says Global Blue.

While their spending growth for October fell to the second lowest of the year at -44% (back to levels seen in December 2014), November sales showed a smaller decline of -30% and December an even smaller one at -12%. That amount to the highest progression of the year according to Global Blue.

Germany remains the favourite country for Russian globe shoppers, where their sales showed less of a decline, reaching -4%.