THE West End is back. The arrival of the Elizabeth Line, recent Pride celebrations and sunshine are just some of the factors which have stabilised footfall and brought much needed certainty back for retailers. It is an environment ripe for growth, and the district has done well, post-pandemic, to remain on track for a £10 billion turnover by 2025. But with the “tourist tax” acting as an effective handbrake on momentum, reaching our full growth potential remains just out of reach.
Despite this, British brands such as Burberry — creator of arguably the most recognisable pattern in global fashion — continue to do their bit to back the West End as one of the world’s most iconic retail destinations. The recent reopening of Burberry’s global flagship store on New Bond Street after a significant refurbishment marks an evolution of its store concept, with the immersive experience balancing rich heritage with a contemporary interpretation. It is a true reflection of the elevated shopping experiences visitors have come to expect of the West End, and of the district’s global reputation for leading the way for retail.
Burberry is not alone. Established brands, such as Rolex and Boodles, are doubling down on their presence in the area, while fast-growth British start-ups such as Gymshark and Manière de Voir have chosen the West End to open their very first bricks and mortar stores. Just a short walk away is another homegrown, innovative retail experience; Flannels X, the “cultural playground” situated in Flannels’ flagship store, promises access to exclusive gigs, exhibitions and brand experiences. It is fair to say these brands are in good company; the district boasts the best of British retail, from Belstaff and Barbour to a returning HMV.
With business doing all it can to safeguard the future of the West End, it is now critical the Government removes remaining barriers to growth. The “tourist tax” puts British High Streets at a 20% price disadvantage when compared with our European neighbours — creating an unlevel playing field and undermining investment in the country.
Business has been told that the Government is firmly on its side, but the reticence to reconsider tax-free shopping is creating an uncompetitive environment for growth that we cannot afford to maintain.
VisitBritain data has revealed that half of long-haul travellers see shopping as a key reason to visit this country. If we fail to reinstate tax-free shopping then we risk not only losing this custom, but jeopardising associated spending in hotels, restaurants and cultural attractions across the nation, all of which could generate significant returns for the public purse.
In fact, contrary to Government figures, independent research from Oxford Economics calculates that reintroducing tax-free shopping would boost the UK’s GDP by more than £4 billion and support 78,000 jobs. Yet currently tourists from the likes of China and the US are able to benefit from tax-free shopping on British brands in mainland Europe, rather than in the very country they were founded.
The message from businesses and other stakeholders is clear: the “tourist tax” is creating an uncompetitive environment for growth. Increased awareness of the impact of tax-free shopping has also been driven, in part, by support from the likes of the Evening Standard and MPs on both sides of the Commons.
The needle is shifting, but if action isn’t taken soon, then we risk losing shoppers to High Streets across the Channel permanently.
We are asking the Government to undertake an independent review of the impact of tax-free shopping, with objective calculations that take into account spending from overseas visitors as a whole rather than solely focusing on the VAT revenue on physical goods.
Calculations carried out in the depths of the pandemic weren’t representative of the new normal, and we must be planning for a return to future growth, not simply a return to 2019.
If the Government doesn’t want to see a shift of investment from flagships in the UK to those on La Calle Fuencarral or Les Champs-Élysées, it must act now. Businesses are still backing Britain and the Government should reciprocate by commissioning an independent review into the impact of tax-free shopping. Failure to do so is a damaging blow to the British economy, and one of which we have yet to feel the full effects.
