Tourists have boosted West End tax-free sales by 44% in August, but retailers in the district are set to be dented by business rates.
Total tax-free sales made by shoppers from outside the EU in the West End grew 44% in August, compared to the same month last year.
According to figures by intelligence firms Global Blue and Springboard, tax-free (non EU) sales on Bond Street were particularly strong last month, with transactions up 48% and sales up 35% on last year.
The spend by Chinese visitors was ramped up to 65% this summer, with an average spend of £1,453 per person, and Hong Kong visitor spend was up 72%. US visitor sales also grew 74%, compared with the same period last year.
“In the new post-Brexit environment, the government should look to support, not undermine, the UK’s economic wellbeing given the uncertain times ahead”
NWEC chief executive Jace Tyrrell
However, New West End Company (NWEC) said that while tourist spend has “done much to alleviate immediate post Brexit economic flux, domestic consumer confidence is less certain”.
The company, which represents businesses in London’s West End, said the business rates revaluation in early 2017 is expected to increase costs on West End retailers by an average of 80%.
It claimed that the revaluation is causing “significant uncertainly in the market at a time of economic doubt, despite the short term benefits as a result of the value of sterling”.
NWEC chief executive Jace Tyrrell said: “The West End has enjoyed a remarkable summer, with the £400m total spend in July giving way to a 44% increase in sales across the district in August.
“Tourists are evidently still keen to cash in on the weak pound and thus have helped alleviate – albeit on a temporary basis – some of the shockwaves that hit the economy following the Brexit vote.
“However, the longer-term horizon once the process of leaving the EU gets underway looks less bright, as the business rates revaluation in early 2017 will hit West End retailers’ profits by up to 25% in some cases.
“Retailers are also expected to manage an average 80% increase which will undoubtedly have significant knock-on effects.”
Tyrrell concluded: “In the new post-Brexit environment, the government should look to support, not undermine, the UK’s economic wellbeing given the uncertain times ahead.”
Total sales in the West End grew 1.5% in August, compared with the same period last year, with department store sales growing 5.2% and sales of luxury goods increasing 19%.
August brought the long-anticipated launch of London’s Night Tube, which drove a 14% lift in footfall on London’s Oxford Street on its opening weekend as shoppers opted to stay out late.