London, 16 September, 2024: The absence of tax-free shopping continues to impact international visitor spending in the West End – the U.K.’s biggest flagship shopping destination – resulting in £220 million in unrealised sales in the first half of 2024. Fresh data from New West End Company also revealed that the loss of the perk cost West End retailers £400 million in 2023.
The absence of tax-free shopping continues to act as a powerful disincentive for international visitors, who can save up to 20% on purchases made in Continental Europe compared those made in the U.K. This has created a persistent, and worrying, ‘spending gap’ which has opened up between international visitor numbers and their associated spend. In 2019, when the U.K. still offered tax-free shopping, visitation and spend trended together.
While the number of international tourists visiting London rose 3% in the first half of 2024 versus H1 2019, international visitor spend fell 12%. In contrast, according to Global Blue data, international spend in Continental Europe has risen sharply since 2019 (36% in H1 2024 vs H1 2019).
The data reveals the stark impact the removal of tax-free shopping has had on businesses in the U.K. capital, with New West End Company calling on the Government to reinstate the policy without delay and return British businesses to a level playing field with their European counterparts.
Dee Corsi, Chief Executive of the New West End Company, commented: “It is bittersweet for the West End that, whilst London remains a highly desirable global travel destination, the absence of tax-free shopping continues to act as a drag on overall spending growth.
“As London Fashion Week concludes, in its 40th anniversary year, we are reminded of the incredible craftsmanship and innovation that makes British fashion globally renowned. And yet, the growth of this vital sector is being hindered, and retailers forced to compete at a disadvantage.
“Critically, the loss of £400 million in unrealised sales last year in the West End alone is just a small part of this story; fewer sales on the shop floor means fewer tourists in restaurants and hotels, and a knock-on impact on our entire tourism ecosystem. If the Government is serious about returning the country to growth, tax-free shopping presents a rare, golden opportunity to do so.”
ENDS
For more information contact: NWEC@headlandconsultancy.com
