Tax-free shopping down

Retailers rely on
expats and local buyers

Tax-free shopping dropped by 18 percent during the first half of 2013, according to Global Blue’s report ‘Insights into Tourist Spending’. The market witnessed sharp drops in the overall number of tourists, especially visitors from Arab countries.

Spending by Qatari tourists fell by 42 percent year-on-year, while spending by Kuwaitis fell by 32 percent. Jordanian tourists’ spending contracted by 31 percent, along with a 30 percent drop in spending by Syrian tourists, and a 27 percent drop in spending by Saudi shoppers.

Spending on souvenirs and gifts was the only category that witnessed growth, up by 16 percent. Eliane Mitri, General Manager of Artisans du Liban gift shop, said souvenir shops might be doing better than other retailers thanks to high demand. “Tourists like to buy souvenirs, and these are the only items which cannot be found elsewhere,” she said. Tania Ezzeddine, Marketing Manager at ABC, said revenues from tourist shoppers make up less than 30 percent of their business. “We rely mainly on our local clients.”

Spending on all other items dropped by 27 percent on average. Tax-free shoppers mainly bought fashion and clothing items, followed by jewelry and watches.

Other retailers' sales were grateful for expatriates, in light of low tourist numbers. Ramzi Moukhaiber, Operations Manager at Chronora, local agents for Rolex, said that sales improved thanks to expatriates - even those residing in Gulf countries. “Locals living and working in the Gulf still prefer buying their needs from our markets because they appreciate the services we offer more.” However, the tax refund culture is not very widespread among them, he said.