Wednesday, February 21, 2024 5:30am
London’s fashion scene is the envy of the world, but abolishing duty-free shopping is the retail industry’s own goal, writes Dee Corsi
London Fashion Week drew to a close yesterday, bringing global attention once again to some of Britain’s best-loved brands.
For many, the West End is the home of British fashion, with traditional brands like Burberry on Bond Street, admired artisans on Savile Row, and innovations like Mannières de Voir, which recently moved away from e-money. even fast-growing startup companies. The company has a flagship store on Oxford Street and operates from commercial to brick-and-mortar stores.
In the West End, fashion is more than the product itself, it’s an experience for many visitors
This is exemplified by events such as London Fashion Week. Retail is adaptable and innovative by its very nature, and the West End is where brands invest and bring fresh concepts to market.
For example, Flannels X, a rotating pop-up space located in Flannels’ flagship store, allows visitors to combine upscale shopping with access to gigs, masterclasses and exhibitions. At Burberry’s renovated global flagship store, the sophisticated store concept deftly balances tradition with a contemporary, immersive experience. And it’s safe to say that these brands are in good company. The area is home to some of the UK’s best retailers, from Belstaff to Barbour.
However, as fashion houses and retailers continue to invest in the UK, they must do so in a non-competitive environment in order to grow. The absence of duty-free shopping effectively means goods purchased in London will be charged a 20 percent premium compared to Milan and Paris, where boutiques still benefit from the policy.
This is already having an impact on consumer behavior, with the latest data showing that spending in the West End will increase in the fourth quarter of 2023, despite the number of international visitors being flat on the same period in 2019. was found to have decreased by 15%. Figures for 2019 illustrate this gap between international footfall and spending even more vividly, with international visitors to the capital down by just 4 per cent compared to 2019, but fewer in the West End. Spending fell by 19 percent. By comparison, in France and Spain, spending by international travelers in the past 12 months has nearly tripled for certain nationalities since 2019.
It is also influencing business decisions. A survey of 600 members across retail, hospitality and leisure businesses last year found more West End businesses were affected by the absence of duty-free shopping than by inflation or the cost-of-living crisis. It turns out. As a direct result, the majority has been forced to reconsider staffing requirements and future investment in the UK.
This doesn’t just affect London. World-renowned for its craftsmanship, our British brand relies on regional manufacturing sites, from our Mulberry factory in Somerset to Burberry’s base in Yorkshire. Tourists come from all over the world to buy products bearing the coveted ‘Made in Britain’ label, but this shift in demand is not just for the flagship store in the West End, but for stores across the UK. It will also impact the supply chain.
Against this backdrop, the opportunities presented by the return of duty-free shopping cannot be overstated. Reintroducing the policy would allow the UK to recoup lost tourism spending across the Channel, while improving access to the tourism market for the first time for 450 million EU residents. . Post-Brexit, the UK will boast the distinction of being the largest and closest duty-free shopping destination outside the region for these shoppers. Furthermore, we already have the infrastructure to support this new market and our regional airports benefit from existing links with their EU counterparts.
It is therefore encouraging to hear that the Office for Budget Responsibility is undertaking a review of the cost-effectiveness of the decision to abolish duty-free shopping for international visitors. The reintroduction of duty-free shopping presents a great opportunity for governments. A proven plan with business support and bipartisan support to restore growth to our national economy.
To be successful, your scheme needs to be best-in-class, but you don’t have to reinvent the wheel. Duty-free shopping is working and we have an opportunity to build a world-class system while providing a boost to the Treasury. We would urge governments to seize this opportunity with both hands.