Milan’s Galleria Vittorio Emanuele outperforming Mayfair
Credit: Grazyna Nowicka – Shutterstock
As UK retailers, such as Selfridges, announce widespread redundancies due to plummeting sales, why are Paris, Milan, and Marbella outperforming London?
European tourist destinations and retail have been enjoying increased sales this year, except in the UK. While London’s tourism figures were up very slightly by 3 percent, the capital’s retail sector noted a 12 percent drop in summer sales compared with data from 2019. At the same time, European high streets have enjoyed a 36 percent increase since 2019.
Once bustling streets now empty as London retail plummets
Some high-end retailers in London, such as Mulberry’s and the upmarket department store Selfridges have been attempting to entice foreign luxury shoppers with their own 20-percent-off reductions in lieu of a tax rebate, but not all retailers can afford this, making the UK much pricier than sunnier climes in Europe. VAT refunds for foreign visitors were scrapped in the UK in 2021, and the effect is beginning to show.
According to London fashion designer Paul Smith, he sometimes looks out of one of his shop windows and sees empty streets where before the pavement was bustling with international shoppers.
And announced in May this year, approximately 70 redundancies were anticipated at Selfridges, marking the second wave of their job cuts within nine months. They, too, blame the halting of VAT-free shopping privileges for international visitors, claiming that it has impacted on sales at the luxury department store.
Foreign tourists looking for tax-free shopping
A report by the Association of International Retail in February found 63 percent of international tourists would be more likely to make large purchases in the UK if tax-free shopping was re-introduced. Research from Oxford Economics suggests that restarting a tax exemption could lead to an additional 1.8 million extra visitors by 2025/26, which could generate £2.8bn of extra spending, and sustain 78,000 jobs.
According to retail consultancy Global Blue, 34,000 tourists have moved from shopping for luxury items in London, while at the same time increasing the amount they spend in other European cities, especially in Italy and France, and as well in Spain.
