London Is Losing Its Crown as a Luxury Shopping Destination - WSJ - 0 views
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London is missing out on a spending boom by wealthy American and Middle Eastern tourists that began last summer and has benefited big cities on the European continent, mainly Paris and Milan. In January, VAT receipts from Middle Eastern visitors to continental Europe, a good proxy for luxury spending, were up 224% compared with the same month of 2019, based on data from tax refund company Global Blue
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American spending was even heavier, with receipts up 297% over the period. The strong dollar means the discount available on luxury goods in Europe has been historically wide recently and U.S. tourists outspent all other nationalities in every month of 2022.
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London’s luxury retailers are lobbying the U.K. government to reinstate VAT-free shopping for visitors. Big department stores like Harrods, owned by Qatar’s sovereign wealth fund, and Selfridges, which was sold for £4 billion in 2021 to Thai and Australian investors, relied heavily on tourist spending before the pandemic.
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If overseas visitors continue to shop in Europe instead of Britain, landlords on the U.K. capital’s poshest streets could suffer. In 2022, London’s New Bond Street slipped out of the top-three ranking of the world’s most expensive retail streets, according to real estate firm Cushman & Wakefield. It was overtaken by Via Montenapoleone in Milan, where rents are now 9% above 2019 levels.