UK high streets falling behind European rivals, study shows

The UK high street is falling behind its European rivals following the government’s scrapping of tax-free shopping at the beginning of last year.

That’s according to data from tax-free shopping refund agency Global Blue, which compared the spending of GCC shoppers in the EU in 2019 with levels in 2021.

It found that 20 percent of those shopping in the EU in 2021 had previously only shopped in the UK in 2019, where they spent an annual average of 24,000 euros each. Fast forward to 2021, and that same group spent nothing in the UK and 22,000 euros each in Continental Europe.

Meanwhile, 50 percent of those shopping in the EU in 2021 had previously only shopped in Continental Europe in 2019, and increased their average annual spending per person in Continental Europe by 10 percent to 22,000 euros.

The remaining 30 percent of those shopping in the EU in 2021 had previously shopped in both Continental Europe and the UK in 2019, but increased their average annual spending per person in Continental Europe by 40 percent to 22,000 euros in 2021.

Calls for more support

It comes as retail, leisure and hospitality industries call on the government to do more to attract international tourists.

Paul Barnes, the chief executive of the Association of International Retail (AIR), is giving evidence at the DCMS Select Committee hearing on Tuesday and urging the government to reconsider the decision to abolish tax-free shopping.

“While domestic shoppers are returning strongly to the high street, we are seeing a noticeable absence of high spending international visitors that goes beyond the consequences of the pandemic,” he said in a statement.

By abolishing tax-free shopping, the UK is giving competing countries such as France and Italy a 20 percent price advantage over the UK, Barnes said.

This is then “pushing those that traditionally contribute around 28.4 billion pounds a year to our economy towards Continental Europe”.

Barnes continued: “This early evidence has shown that the treasury’s calculations are wrong and we fundamentally believe that this will lead to a net loss for VAT and our wider economy, as international visitors with deep pockets spend less time and money in the UK.”

As well as calling for a reconsideration on tax-free shopping, AIR is also urging the government to enhance the Electronic Visa Waiver Scheme for visitors from the GCC, and to extend Sunday trading hours.