Kurt Geiger’s boss has said the UK is shooting itself in the foot by not bringing back tax-free shopping for international visitors.
Kurt Geiger’s chief executive, Neil Clifford, told The Times that the end of VAT-free shopping has had a “massively negative effect” on Britain”.
“International tourists, whether it be Middle Eastern or American travellers, are spending less time in London,” Clifford said. “If you go to Milan or Paris or Madrid — my team and I are in those markets often — there’s no doubt they’re busier.”
Under the scheme, which scrapped at the start of 2021, visitors were able to claim 20 per cent of their purchase back.
Its removal has seen visitors head to other European shopping hubs in search of better deals.
There has also been a rise in visitors travelling to London, finding their chosen purchase, and then travelling to a different European city to buy the product.
“It really affected London, but actually right across the UK we saw that negative impact almost immediately. It is still having a massively negative effect,” Clifford said.
He added that a boost was needed after “such a difficult few years in the UK from a consumer perspective. From pandemics to wars to elections to silly budgets to the cost of living crisis. I mean, you couldn’t make it up, really, could you?”
The so-called ‘tourist tax’ has been slammed by business leaders across the board, from Oxford Street businesses and high-end designers to airport chiefs.
Research last year showed that removing the tourist tax could generate £4.1bn annually for the UK economy.
“The tourist tax is an economic own goal. Re-introducing the VAT reclaim scheme would boost UK’s flatlining economy through increased spending from international visitors in our shops, restaurants, hotels and more,” John Dickie, chief executive at BusinessLDN, said at the time.
“It would help to increase the number of international tourists who visit London and the United Kingdom, which in turn will provide a much-needed boost to businesses and high streets across the country – while providing billions of pounds to the Treasury each year,” Khan has said.
Earlier this year, a surge in demand for denim handbags and footwear linked to Taylor Swift‘s global Eras Tour have helped sales at Kurt Geiger jump by 35 per cent.
The brand revealed annual sales of £360m for the year to February 2024, up 10 per cent, and said that 2024 was on track to “smash all predictions”.
The business added that its 3,000 sq ft global flagship in Oxford Street, London, which opened in October, has “exceeded all sales predictions” and is on course to be its most profitable location.