What: According to Harrods, the UK is shooting itself in the foot with the cancellation of the VAT refund scheme.

Why it is important: It is not so common to hear Harrods, a notoriously discreet institution, taking such a strong public position against the UK government. Does this mean that department stores, just like brands, are expected to be increasingly politicized?

Michael Ward, CEO of Harrods, warned that London is trailing behind Paris and Milan in luxury trade, due to the lack of attractivity of the country following the decision to stop tourists visiting the UK to reclaim VAT. The measure was scrapped at the end of 2020 following Brexit and was very briefly supposed to be cancelled in Q4 2022.

As a consequence, goods purchased in London are more expensive than in other European capitals, forcing Harrods to source products that are not found anywhere else.

Shoe retailer Kurt Geiger’s CEO also mentioned that the measure was heavily counterproductive and affecting UK sales.

Harrods CEO takes a public stance against the UK government decision to scrap VAT refund