London's luxury retail industry is concerned that the city is losing its allure as a shopping destination. Tourists from the United States, China, and the Gulf are flocking to Paris and Milan where

tax breaks still offer a way to reduce the cost of their purchases. London luxury retailers are calling on the government to reinstate sales-tax-free shopping for overseas visitors, which ended in 2020 when Britain left the European Union.

Finance minister Jeremy Hunt is set to present the government's budget statement on Wednesday, and the luxury retail industry is urging him to change the rules. Big names, including department stores Harrods and Harvey Nichols, Chelsea property manager Cadogan, and The Lanesborough Hotel, have joined forces with hundreds of retailers to make their case.

Steve Medway, CEO of the Knightsbridge and King's Road Partnerships, explained that some brands are prioritizing Paris for investment in stores, noting that they are seeing sales. International visitors contribute £28.4 billion ($34.5 billion) to UK GDP annually, of which Knightsbridge and the King's Road are a substantial part. Medway also stated that the industry is seeing a trend where luxury shoppers are choosing to go to Paris or Milan instead of London, which is causing concern among retailers.

Data from international tax refund company Global Blue shows that while spending by U.S. visitors to Britain has recovered to 2019 pre-pandemic levels, their spending in France, Spain, and Italy has shot ahead. London's luxury retail industry is therefore worried that the trend will continue and that they will lose out on a significant amount of revenue.

The end of tax-free shopping for overseas visitors is not the only issue affecting London's luxury retail industry. The COVID-19 pandemic has had a significant impact on the industry, with stores closed for months at a time, and international travel restrictions preventing tourists from visiting the city. The industry is now calling on the government to provide additional support to help it recover.

The British Retail Consortium (BRC) has also called on the government to introduce measures to support the retail industry. It has suggested that the government could reduce business rates, introduce a digital sales tax, and extend the current furlough scheme. The BRC has warned that without additional support, many retailers may be forced to close their doors permanently.

In conclusion, London's luxury retail industry is concerned that the city is losing its appeal as a shopping destination. With tourists from the United States, China, and the Gulf choosing to visit Paris and Milan instead, the industry is calling on the government to reinstate tax-free shopping for overseas visitors. The industry is also asking for additional support to help it recover from the impact of the COVID-19 pandemic. Without intervention, many retailers may be forced to close their doors permanently. Photo by Edwardx, Wikimedia commons.