Revive VAT-free shopping to boost high streets, Selfridges urges Burnham

Retail giant Selfridges is urging new Prime Minister Andy Burnham to reintroduce VAT-free shopping for international tourists in order to revitalize British high streets and stimulate regional growth. The luxury department store criticized the decision by former Chancellor Rishi Sunak to abolish the policy in 2021, stating that it has only exacerbated the challenging retail and economic conditions.

André Maeder, Selfridges' chief executive, emphasized that such policy decisions have made the situation "more difficult." He urged Burnham to prioritize bringing back tax-free shopping, which he believes will benefit the entire UK economy.

The call for VAT-free shopping has garnered support from other high-profile retailers, such as Burberry and Mulberry. Business leaders from various sectors, including hospitality and retail, have welcomed the Conservatives' pledge to reinstate the policy if they regain power. They argue that tax-free shopping would give Britain's "retailers, hotels, restaurants and attractions" a competitive edge and help the country's tourism industry stand out against global rivals.

Selfridges' own financial performance reflects the benefits of selling higher-margin products, with an impressive 88% increase in profit to £24 million last year. Revenue across its four UK locations grew by seven percent to £831 million. However, the company's profit growth was tempered by a decline in online sales. Selfridges attributes this to its strategic focus on selling more profitable goods, while also investing in enhancing the in-store experience in London, Birmingham, and Manchester. The department store was recently acquired by Thailand-based Central Group for £4 billion.