Tax-free shopping has been placed on hold since the UK left the EU in December 2020, coming about in non-EU tourists being committed to pay a 20 percent charge on merchandise bought in the country.
Brands have been encountering less sales, with numerous UK brands, particularly lavish ones, seeing sales reducing and shutting down local stores, SchengenVisaInfo.com reports.
A Westminister banter on travel tax, which is booked for September 7, will decide if the ongoing retail challenges will stay or change as local brands keep on feeling the effect of Brexit.
UK Luxury brand Mulberry has been working for more than 50 years, yet the prolonged stretch of time in the UK market doesn’t mean it can stay unaffected by these changes. In January 2023, the brand needed to shut down its first store in London.
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As per the President of ‘Mulberry’ Thierry Andretta, If they will be ready to get the U.K. economy back to growth, they need a level battleground with Europe. He said they currently can’t compete with Paris, Berlin and Milan who are benefitting to their detriment.
According to data from the retail consortium New West End Organization, notwithstanding flight appointments to London from the US being up by 17% compared to pre-pandemic times, the aggregate sum spent by American guests in the West End in shopping action had reduced by one percent.
Meanwhile, travel from the Gulf nations, for example, Qatar, Saudi Arabia and the United Arab Emirates to London has increased – being seven percent (7%) in the quarter, contrasted with a long time back, while spending was somewhere near 17%.
The Chairman of Burberry, Gerry Murphy, had previously told Prime Minister Rishi Sunak that the decision to tax shopping for non-EU tourists had made the UK one of the least attractive destinations.
The luxury brand’s CEO, Jonathan Akeroyd, said that Burberry’s travelers getting back to London have also increased by 19%, yet it actually remains far behind the rest of Europe.
For instance, in Paris, traveler returns were up by three digits while those numbers rose by 43% in Milan.
Burberry has also detailed that the absence of the travel industry spending has affected UK sales for the most part, with CFO saying that even English customers like to spend in Europe as opposed to the UK.
