Russian shoppers seeking luxury are back in Europe
By Don-Alvin Adegeest
Dec 1, 2016
Europe's luxury houses have seen an increase in Russian shoppers with offers of easier tax free spending and favourable exchange rates.
This is the first growth in over three years, according to Global Blue's October transactions data, which show on average a +10 percent spend increase across most of their favourite European TFS destinations where 99 percent of the Russian tax-free spend is captured.
According to Global Blue, last month’s Russian TFS spending growth pockets were concentrated in Italy (+12 percent) , Finland (+7 percent) and Spain (+25 percent), compared to the same period last year. Notably Russians are benefitting from the absence of negative currency FX conditions, so the flat year-on-year exchange rate of the ruble vs the euro is helping push up their spending and consumer confidence.
Fashion is the key motivation for Russian globe shoppers and the category is showing slight growth of +2 percent sales development for October year on year.
With the exception of Spain, the Russian spending turn around is happening mainly on entry level and premium products. Russian globe shoppers are making the most of some extra rubles to spend on ‘affordable luxury’ items, but at the other end of the wealth scale, Russians who are shopping for hard-luxury items are finding that their favourite brands remain very expensive compared to three years ago.
According to Global Blue data, Russian TFS transactions by price band were up +21 percent in the UK across both entry (up to 500 euro) and premium (500-2000 euro) levels, while in Italy the same price bands saw increased transactions of +9 percent and +10 percent respectively. Spain was the only destination with increased transactions of +57 percent for the highest price band of over 5000 euro.
Photo credit: Louis Vuitton bag, source: LouisVuittom.com