Shoppers outside Selfridge's in London. The UK is losing ground to France, Italy and Spain when it comes to non-EU visitor spending because of the scrapping of VAT-free shopping, business fear. Derrick Hardman, chairman of the Association of International Retail, said: 'A big gap has opened up between the UK and its EU rivals when it comes to spending by visitors from around the world. The cause of this is no mystery – the removal of tax-free shopping by the last government is putting people off coming and spending here.' Getty Images
Shoppers on a busy retail street in Madrid, Spain. Spending by non-EU visitors in the UK has stagnated at just 75 per cent of pre-Covid levels in the UK, while soaring to 166 per cent of 2019 levels in Spain, 159 per cent in France and 137 per cent in Italy, according to tax-free shopping specialist Global Blue’s data for September. Non-EU visitor spending is growing year-on-year in the EU, but has plateaued in the UK. Spending by visitors from Gulf states is worst affected, down 27 per cent on 2019 levels in the UK, but up 169 per cent in France, 154 per cent in Spain and 153 per cent in Italy. Getty Images
Almost 96 per cent of businesses in the West End, pictured above, believe international customers have moved their spending to cities such as Paris and Milan, with 81 per cent seeing fewer international visitors, according to a survey in August by the New West End Company. Getty Images
Galeries Lafayettes’s flagship store in Paris, above, achieved double-digit sales growth in the first half of 2025, as the city enjoyed a flood of tourists. International visitors to the French capital rose 9 per cent for the period, with almost 22 million non-French customers visiting the store. It is expected to exceed €2 billion in turnover this year. Getty Images
In Italy, Rinascente stores, which has its flagship in Milan, reported a net profit of 12 per cent year-on-year for the first six months of 2025. Alamy
In Spain, luxury department store El Corte Ingles promotes its shops in Madrid, Barcelona, Marbella and Lisbon as key destinations for luxury shoppers, offering an instant 15 per cent tax refund with no minimum spend. The business grew 3.9 per cent in the last financial year. Getty Images
It’s not just those traditional shopping destinations. Norway’s Steen & Strom, which claims to be the oldest department store in the world, reported a 27 per cent rise in tax-free sales to tourists in the first eight months of this year. It said its customers told them they were choosing to make luxury purchases abroad rather than in London. Getty Images
