Walpole Continues to Push for Tax-free Shopping for Overseas Visitors With New Report
LONDON — Walpole, the lobby group that represents British luxury brands across a variety of industries, continues to push for the return of a tax-free shopping plan for international visitors in its inaugural “State of London Luxury,” published in partnership with Cadogan, which manages 93 acres of land in Chelsea on behalf of the family of Earl Cadogan.
The report, which is set to publish annually, aims to serve as a barometer of London’s position as a world-leading luxury goods market. It projects that the luxury sector in London could reach a value of 28 billion to 30 billion pounds by 2024.
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A survey featured in the report shows that 71 percent of respondents expressed positivity about the prospects for their business at present, a sentiment that rises to 81 percent over the next two to three years. The opening of 12 new five-star hotels between 2022 and 2025 is set to attract more high-end visitors, who have already outspent mass tourists by 14 times per trip and double that of high-end visitors to other European cities.
The survey also shows that 82 percent of respondents believe that the blend of major luxury brands and local British icons is a major contributor to London’s distinctiveness in the luxury landscape. Renowned luxury retail districts like Knightsbridge, Chelsea, and Mayfair have attained global acclaim, and 69 percent of participants ranked Bond Street among the world’s top three luxury streets.
Meanwhile, London’s affluent “villages” — including Connaught Village, Marylebone Village, Little Venice, and Shoreditch — offer hyperlocalization and trend-led retail and dining experiences that can’t be found anywhere else in the world. Some 61 percent of respondents in the survey identified understanding and profiling local residents as a key success criterion for their businesses.
While listing the positive highlights of London’s bright future in the luxury retail sector, the report continues to demand the British government reverse its decision to scrap duty-free shopping for international visitors following the U.K.’s departure from the European Union.
Walpole has been actively campaigning for it on behalf of its members, and the introduction of “a modern, digital, VAT-free shopping scheme” was included in former Prime Minister Liz Truss’ 45 billion pound tax-cutting mini-budget plan. But it was later scrapped as Rishi Sunak came into power. Sunak has been criticized by business leaders over this decision.
The report said that “with a different policy approach from government, it would be possible to further optimize its [London’s] attractiveness as a city to visitors, businesses and investors alike.”
Helen Brocklebank, chief executive officer at Walpole, added that, “If a next-generation tax-free shopping scheme could be introduced, London’s status as the world’s number-one luxury city would be guaranteed.”
It’s estimated that the return of the policy would be a windfall for the whole U.K., including London. It would add 4.1 billion pounds to the U.K. economy and create an additional 78,000 jobs, according to the report.
The other areas that can be improved to boost the British luxury sector include easier visa arrangements for international visitors and skilled workers.
The report noted that “The government should extend the electronic visa waiver to other high-spending markets beyond the GCC, particularly to the Far East. Likewise, a joint U.K./Schengen visa would significantly reduce the complexity for international visitors planning a trip to Europe,” and “The U.K. must begin offering more working visas, especially for young people, and recognizing that providing luxury service, be that in retail, hospitality or elsewhere, is a skilled profession that should be classified as such by the Migration Advisory Committee.”
Paul Scully, minister for London, agreed that “luxury brands have a hugely significant role in keeping the city in the mind’s eye of visitors across the world. Brand makers and policymakers alike need to continue to work in lockstep to ensure London remains the best city in the world in which to live, work and play.”
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