Retailers in West End in London missed £ 640 million in sales last year because of the removal of tax -free shopping for international visitors, according to new research.
Figures from the New West End company, which represents companies in the district, reveal that the income lost from tourist spending was increased from £ 400 million in 2023, which emphasizes the continuous impact of the government’s policy change.
Analysts noted that although the expenditure by British consumers at West End retailers fell by 2.2 percent during the most important festive trade period of November-December, international visitors’ expenses increased by 3.5 percent. The boost was largely driven by a strong question from German, American and Saudi Arab tourists.
The West End company called data from Global Blue, a tax-free store consultancy firm, which showed that sales in the store in Europe in November increased by 16 percent and 20 percent in December. In contrast to the UK, most European countries offer tourists up to 20 percent tax relief on purchases, stimulating higher spending and giving the continent a competitive advantage in relation to London.
The conservative government deleted tax -free shopping for international visitors in January 2021, and claimed that the decision would not have ‘significant economic effects’. However, the latest figures suggest the opposite, whereby companies in West End warn that London loses rival store destinations in Paris, Milan and Madrid.
“With international expenditures still under pre-Pandemic levels, the British lack of a robust tourist strategy and the removal of VAT-free shopping London in a competitive disadvantage against important European cities, which stacked recovery and growth,” the West End explained -company.
They added that, although domestic consumer expenditures remain under pressure, international visitors offer an untreated opportunity for economic growth. “In the light of constant pressure on domestic expenses, the policy environment must quickly evolve to support business stability and meaningful growth.”
Despite weak consumer expenditure in the past two years, recent data from the British Retail Consortium and KPMG suggest a potential turnaround, with retail sales rising by 2.6 percent in January – the biggest increase in almost two years. Separate research by Barclays showed that the expenditure for non-essential goods increased by 2.7 percent, with a strong demand for health and beauty products.
Dee Corsi, Chief Executive of the New West End Company, warned that economic uncertainty and a lack of government action continue to hinder growth. “Challenging economic headwind and policy intake are stopping us. International visitors would like to spend in a time when domestic expenditure is declining, but without a robust tourist strategy we lose our European competitors. “