West End calls for action as footfall plunges, wants duty-free change

By

Sandra Halliday

Published
Jul 16, 2020

The New West End Company is calling on the UK government to take action to introduce tax-free shopping for European tourists post-Brexit as what should be Britain’s busiest shopping area continues to see a mere trickle of visitors. The neighbourhood has up to 50,000 jobs at risk, NWEC claimed.

On Thursday, NWEC, which represents 600 retailers and businesses across Oxford Street, Bond Street, Regent Street and Mayfair, said the latest footfall figures for the full month since retail reopened on June 15 are historically low. 

And it said that without government intervention, those 50,000 jobs are at risk because retailers in the area are facing a potential £5 billion worth of lost sales.

The current situation really is dire with the West End having seen only 5.1 million visitors since June 15. That may sound like a lot, but it's down 73% year-on-year and footfall in central London is currently 19% lower than on UK high streets nationally. This is because the office workers and both domestic and foreign tourists who make up the bulk of its visitors are nowhere to be seen.

NWEC said city centres in general, but especially the normally-buzzing West End, are “being held back by a series of restrictions, including uncertainty surrounding returning to work and the use of public transport.”

And retailers in the West End will be under huge pressure due to the imminent end of the Brexit transition period.

NWEC is pushing for the inclusion of EU shoppers in the group of consumers allowed to claim back their VAT for goods they buy when in Britain, the same duty-free shopping regime that’s enjoyed by tourists from the rest of the world.

The ability to claim back the 20% VAT usually means visitors from the US, China, Russia, The Middle East and more flood into London. But visitors from EU states haven’t been able to shop duty-free in London since the launch of the single market decades ago.

Given the potential post-Brexit devastation of UK retail, NWEC is calling for new thinking.

“Long-term measures are needed to boost businesses as and when international visitors return to our city centres,” NWEC said. “Making a low-cost and effective change to the tax-free shopping system will generate more revenue and encourage more international shoppers to spend in the UK. Seventy percent of all international visitors to the UK are from EU member states, but they are currently excluded from its tax-free shopping scheme. Including them post-Brexit could add up to £1.4 billion in retail sales annually and give an overall benefit of £2.1 billion to the UK economy.

Ian Earnshaw, Commercial Director at Mulberry, which has shops on Regent Street and Bond Street, added: “With the decline in sales and footfall brought on by Covid-19, the retail and leisure sector urgently need new measures to ensure that businesses in London and the wider UK can operate on a level playing field as they recover from the implications of the pandemic. The tax-free shopping reform is a low-cost and effective change that will enable UK retail businesses and destinations to regain a competitive advantage against other retail centres and compete on the global stage.”

Jace Tyrrell, NWEC’s chief executive, added: “The protection of retail and leisure jobs is our utmost priority, and while the government’s measures take the first step in supporting the West End’s recovery, without consumer confidence to travel and visit; this situation is highly precarious with 50,000 jobs at risk. 

“With no international visitors and mixed messaging surrounding the safety of returning to work and using public transport, we urgently seek clarity of government messaging for our businesses to survive. With the UK-EU trade deal deadline also looming, we need to ensure that destinations that rely on international visitors, which have been so hard hit by the pandemic, are accounted for in longer-term recovery plans including levelling up on tax-free shopping with the EU.”