West End gets Brexit boost from overseas shoppers as sales to tip over £9bn for the first time
Overseas shoppers are flocking to the West End to spend their cash since the fall in the value of the pound – and the Brexit boost is set to tip sales for the district over £9bn this year.
Jace Tyrrell, chief executive of the West End lobby group New West End Company, says London's premiere shopping district has benefited hugely from Brexit this summer because half of the area's shoppers are tourists.
"We've probably had a better summer than previously because of what's happened," he told Morning Wire. "I think we're probably for the first time ever going to tip over £9bn worth of sales this year for the West End. That's three or four per cent on from where we were last year, and it's come in during the second half of this year."
"Within that you have variations – luxury brands are doing very well, and that's certainly to do with the pound. Brexit has certainly helped us in terms of this part of the year, and we'll see that through Christmas."
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In August, total non-EU sales in the West End jumped 44 per cent as compared to the same month last year. Luxury retail sales were up 19 per cent on last year, according to the New West End Company's figures.
Sales to visitors from the USA and China increased by 74 per cent and 65 per cent respectively.
But while the West End's retailers have had some short-term benefits from Brexit, the outlook for the district's commercial office space is less certain. Tyrrell is keen to make sure UK financial services secure the so-called passporting rights required to access European markets.
"Sixty per cent of our buildings are commercial office space and we have a huge amount of hedge funds, support services and financial services," Tyrrell said. "We have to make sure we have passporting rights."
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City workers are also vital for the West End economy, for both its retail and leisure businesses. And the amount of money they spend is more vital now than ever because businesses in the area face a business rate reevaluation that could hit some retailers' profits by 25 per cent. Tyrrell expects rates will be increased by between 80 per cent and 160 per cent.
"We think transitional relief [on business rates] is highly likely – we are hoping the increases will be transitioned over five years" Tyrrell said. "It allows businesses to adjust their pricing and their business plans. The mayor's office has been very sympathetic – Sadiq Khan has supported our call for transitional relief."
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"For any business that has to have an 80 per cent increase in tax in one year, it's not sustainable. We accept that we have to pay our taxes, but allow us to grow our profits to help pay those taxes."
West End businesses will find out what the extra tax burden will be on 30 September, when the result of the reevaluations is published. But retailers will have to wait for Chancellor Philip Hammond's Autumn Statement on 23 November to find out if the government will offer transitional relief. Tyrrell said this will be crucial for retailers in 2017, when he expects the UK economy will become "fragile".