Watches of Switzerland: Tourist tax ‘biggest single frustration’ for UK retailers
The government’s decision to scrap VAT-free shopping for tourists is continuing to hold UK retailers back, Watches of Switzerland has warned.
Chief executive of the FTSE 250 luxury watch seller Brian Duffy told City PM it was “probably the biggest single frustration” for the British retail sector.
“I was in Italy this weekend and the amount of American tourists that were shopping was very visible and the UK is not getting anywhere near its fair share of that,” Duffy said.
“The UK is missing out.. it’s an opportunity for growth,” he added.
The government ditched the VAT refund for tourists in 2021, when Prime Minister Rishi Sunak was Chancellor – a move that has since been dubbed ‘the tourist tax’.
Duffy joins a host of other leading British business figures that have called on the government to reintroduce the scheme.
Heathrow chief commercial officer Ross Baker recently spoke out against the tourist tax, describing the removal of the scheme as “disastrous” for the UK’s competitiveness.
MPs are set to debate the policy in parliament in September.
Duffy made the comments after Watches of Switzerland posted its results for the first quarter, revealing that revenue declined slightly.
Revenue for the 13 weeks to July 30 dropped to £382m, 2.3 per cent down on the same period last year.
However, it said demand for watches remained robust, and maintained its full-year guidance, expecting annual revenue of somewhere between £1.65bn and £1.7bn.
“FY24 guidance remains unchanged, with a return to more normalised growth in the balance of the financial year where we will maintain performance against softer comparatives. Our guidance does not reflect any expectation of an improvement in consumer confidence in the remainder of the financial year,” the company said.