Buoyed by big names in fashion such as Vivienne Westwood and Stella McCartney, London has nevertheless fallen out of favour with overseas visitors looking to combine a getaway with shopping. The removal of tax-free shopping after Brexit would be responsible.
Whether it’s a stroll through the designer boutiques of Regent Street, a trip to Harrods for an iconic shopping experience, or browsing in Covent Garden or Camden Market, London has long been known as a shopping hotspot. But since the Brexit agreement signed with the European Union on December 30, 2020, the British capital appears to be less of a destination for shoppers, at least for those from countries outside the European Union.
Indeed, overseas shoppers have become accustomed to getting their designer handbags and garments tax-free. The disappearance of this tax refund possibility since Brexit, except in Northern Ireland, was already denounced last year by many major British luxury brands, who are seeing their foreign customers choosing other countries for their lavish shopping sprees.
France, Italy and Spain are three countries that are increasingly being chosen by foreign travellers for their shopping trips. France and Italy are particularly desirable, with Paris and Milan the EU’s undisputed shopping capitals. According to a report by Global Blue, a Swiss company offering tax-free services to international travellers, quoted by the Schengen Visa News website, some 162,000 tourists required compensation for VAT sales tax in the UK in 2019. Now, one-fifth of those tourists are taking advantage of rebates in the EU, where the tax break is still effective.
An even greater shortfall for the UK since spending in the EU among the 34,000 visitors who have shifted their duty-free purchases outside the country averaged EUR 3,800 in 2023, a 31% increase compared to EUR 2,900 in 2019.
The purchases were primarily made in France and Italy. In 33% of cases, they were made by travelers from the Middle East. Visitors from the US represent the second-largest group of visitors who combine travel with shopping (19%). The cliché of the Chinese traveller raiding French department stores is a thing of the past. Since the pandemic, far fewer Chinese tourists have been coming to Europe.