Tax free, luxury prices impact on spending
Key points
At a time when luxury is experiencing more than one difficulty, the tax free market in this segment grew by 7% between July 2024 and June 2025. This increase, however, has been held back by the reduction in both the number of shoppers (+5%) and their average expenditure (+2%) due to the impact on the one hand of the prolonged absence of the Chinese shopper (once the first nationality for purchases, with a share of about one third of the total) and the flight of aspirational customers who, despite the economic incentive represented by tax free purchases and therefore by the refund (albeit not full) of VAT, are buying fewer luxury products due to the excessively high prices.
Declining aspirational customers among travellers in Europe and Italy
The picture was drawn by the Global Blue study, presented in Milan during the second edition of the Luxury Insight event. The report indicates a drop in the share of aspirational shoppers who have made at least one luxury purchase, from 26% in 2019 to 22% today on a European scale and from 48% to 41% in Italy. Global Blue wanted to investigate the reasons for this drop with a survey that showed how price increases have led to buying fewer luxury goods (43%), looking more frequently for discounts and promotions (37%) and looking to the second-hand market (21%). Price increases were irrelevant for less than one aspirational consumer in five (18%). The effect of this reshuffling was seen above all on purchases of clothing, leather goods and bags.
Only six out of 10 Chinese tourists have returned compared to pre-Covid
Coupled with this trend is the slowdown in luxury tax-free spending by Chinese tourists in Europe, who have never recovered their pre-pandemic spending levels and between 2019 and 2024 experienced an average annual growth rate of -8%; in the first half of 2025, the recovery rate of spending was 62% compared to 2019. Overall, their contribution to total tax-free sales in Europe fell from 32% to 13%, surpassed by the US (22%) and the Gulf countries (13%) as their purchases, which globally weigh almost a quarter of the total, shifted to closer destinations such as Japan.
They keep the most exclusive products (which the super rich like)
Products in the exclusive segment (including jewellery) have suffered less, thanks to the attention that ultra high net worth individuals have for this hyper-exclusive luxury market segment: although they represent an insignificant percentage of the number of customers (0.1%), they generate 20% of total volumes, with an average expenditure of €132,000 per shopper and a CAGR of +15% from 2019. Italy has an important weight in this segment: according to Global Blue, 44% of Uhnwis who shopped in Europe chose our country as their shopping destination, second only to France (68%).
Tourists from the US, Gulf countries and the very young among the most active consumers
A further growth factor is represented by shoppers from the United States and the Gulf countries: the two nationalities contribute to overall luxury tax free spending with shares of 22% and 13% and a year-on-year growth in spending of +12% for Americans and +14% for Arabs. In Italy, the share of US shoppers is even more significant, reaching 25% of luxury tax free spending. A mention should also go to Gen Z, which marks an increase in both the number of shoppers (+21%) and spending (+24%).
