Dixons Carphone To Shut All Airport Concessions After Tax-Free Shopping Scrapped.
Electricals retailer Dixons Carphone is to close airport store business Dixons Travel after it was hammered by the pandemic and the end of tax-free tourist shopping. The stores were popular with expats and the like who regularly browsed for bargains while waiting for the boarding gate notifications to come up.
The stores will be the first major casualty of the post-Brexit ‘tourist tax’, which was bitterly fought by retailers, hospitality and other tourism-dependent businesses. Experts today said the 35 Dixons Travel stores would be the first of many closures, triggering tens of thousands of job losses. In London, there are eight Dixons Travel outlets at Heathrow and four at Gatwick.
Shares in the PC World owner slid after it revealed plans to shut the 35-shop business and were 4.1 per cent lower at 150.8p in early trading. It told investors that it does not expect passenger numbers to “sufficiently compensate for the removal of airside tax-free shopping,” which was introduced by the government at the start of the year.
“This has led to the difficult decision to close this business, which historically made an annual profit contribution of over £20 million,” the company added.
The group said that around 400 staff at Dixons Travel have been offered jobs in other areas of the business. In an update to the stock market, the company also said that it has now reimbursed the government with the £73m (€84m) in furlough support it claimed following the impact of Covid-19.
Dixons Carphone said it has also paid all of the £144m (€165.89m) in VAT deferred by the government in the past year. Sales in 2021 have “remained strong” despite the third national lockdown, the company said in the update.
It said that group revenues saw like-for-like growth of 12 per cent in the 25-week period of April 24, driven by 14 per cent growth in its international business. Meanwhile, its UK and Ireland electricals operations delivered 11 per cent like-for-like sales growth.
This was boosted by “very strong online growth,” with group electricals online sales more-than-doubling to £4.5bn (€5.18bn) for the year.
THE Airport Operators Association (AOA) slammed the British government’s decision to scrap tax-free sales for passengers departing England, Scotland and Wales from January 2021. The AOA immediately condemned the move announced by the Treasury yesterday on September 11, 2020 by saying it “needlessly harms an industry in peril.”