Selfridges has called on Prime Minister Andy Burnham to reinstate VAT-free shopping for international tourists, highlighting the policy as a key driver to revive British high streets and stimulate regional economic growth. The luxury department store chain, which recently reported a significant increase in profits, criticized the 2021 abolition of the VAT Retail Export Scheme, which previously allowed overseas visitors to claim refunds on value-added tax for purchases made in the UK.

The company’s Chief Executive, André Maeder, stated that the challenging retail and broader economic environment has been exacerbated by the removal of tax-free shopping. He expressed optimism that the policy’s return is now under consideration and urged the government to act promptly to support high street retailers and unlock growth across the UK.

In the 12 months ending January 3, Selfridges posted an 88% rise in pre-tax profit to £13 million, compared to a loss of £15.9 million in the previous year. Revenue grew by 7% to approximately £831 million across its four UK stores, including locations in London, Birmingham, and Manchester. The company attributed its improved financial performance to a focus on higher-margin merchandise and effective cost control measures, which offset weaker online sales. Operating profit at Selfridges’ trading entity rose to £79.7 million from £42.2 million, although higher interest expenses related to store leases slightly reduced overall gains.

Selfridges’ total revenue, including sales generated by brand partners operating within its stores, reached £1.6 billion. The department store also increased its cash reserves to £166.3 million, a rise of nearly £23 million compared to the previous year. The company did not declare any dividends during this period.

Selfridges, sold in 2022 by the Weston family to a consortium comprising Thailand-based Central Group (60%) and Saudi Arabia’s Public Investment Fund (40%), joins other luxury brands such as Burberry and Mulberry in lobbying for the return of tax-free shopping. The move has gained some political traction, with business leaders welcoming proposals from the Conservative Party to reinstate the scheme if they return to government, while the opposition has also voiced support. Shadow Chancellor Andrew Griffith noted that restoring the policy would benefit retailers, hotels, restaurants, and tourist attractions by incentivizing spending from overseas visitors.

As the debate continues, Selfridges and its peers remain focused on policies that can enhance the competitiveness of UK retail destinations in a difficult economic environment marked by inflationary pressures and changing consumer behaviors.