During the Ramadan season, travellers from the Gulf Cooperation Council (GCC) – Kuwait, Qatar, Saudi Arabia and the United Arab Emirates (UAE) – usually flock to Europe in an attempt to escape rising temperatures in their countries and shop before and after the festivities.
Again this year, GCC travellers’ spending on shopping has not disappointed. Due to the celebration of Ramadan earlier in 2019 than in 2018, started on 5 May and ended on 3 June, European retailers have recorded an increase in GCC Tax Free Shopping activity over the previous year.
GCC travellers took full advantage of favourable exchange rates in the region and increased their spending on Tax Free Shopping by 16% between April and June, with a spectacular growth of 57%, representing 10% of total Tax Free Shopping activity in Europe that month.
In parallel, all GCC nationalities increased their average expenditure per operation during the period April-June and contributed to a 4% increase in the region’s average expenditure.
Destinations: a purchasing Mecca, two new competitors
The United Kingdom remains a point of reference for GCC shopping. The island country managed to capture almost half of GCC travellers’ expenditure between April and June 2019, followed by Italy (13 %) and France (9 %).
Turkey and Italy appear as surprise intruders in Ramadan 2019. Encouraged by the ease of obtaining a visa from Turkey (1 ) and the efforts of Italian retailers to attract affluent GCC shoppers, their store sales are growing faster than in any other European country, with an increase of 44 % and 47 % respectively in the period April-June.
In terms of categories of purchases, GCC citizens still prefer to shop in department stores. The category represents about 40 % of their expenditure on Tax Free Shopping from April to June 2019, followed by Clothing and Fashion with 31 %. However, the category of Leather Goods and Bags and the category of Watches and Jewellery grow at a faster pace, with an increase of 27% and 29% respectively in the same period.
The British exception and the fracture of stereotypes
The GCC’s activity in the United Kingdom is unique, as 72 % of its Tax Free Shopping activity in the country corresponds to department stores between April and June 2019. In comparison, in other countries, its expenditure is much more balanced and more evenly distributed. This behaviour shows the ability of British department stores to attract and welcome GCC buyers in their stores.
GCC travellers are more varied than might appear at first glance. A more detailed analysis of the combination of GCC nationalities in the UK reveals that the citizens of Qatar and Kuwait clearly prefer the island country for shopping during the Ramadan season. In contrast, citizens of the United Arab Emirates and Saudi Arabia opt for other European countries to buy during Ramadan.
After the four-week hiatus in purchases imposed by religious celebrations, the GCC’s spending on Tax Free Shopping recovers its usual levels. However, if the analysis of the two weeks after Ramadan (10 June – 7 July 2019) is deepened, different purchasing dynamics can be seen depending on nationality. The Catharis and Saudis are slower to resume their normal purchases and show, respectively, a decrease of 48 % and a slight progression of 4 % in their Tax Free Shopping operations. By comparison, the return of the citizens of Kuwait and the United Arab Emirates to Tax Free Shopping is much more solid, with a 67% increase and a 23% increase in the number of operations.
(1) For stays of less than 90 days, citizens of Kuwait and Qatar do not need a visa to visit Turkey. Citizens of Saudi Arabia and the UAE only need to apply for a visa online prior to arrival, valid for 90 days.
Autor: Global Blue