Electronics retailer Dixons Carphone has announced plans to permanently shut all of its Dixons Travel airport outlets.
The group has a total of 35 airport stores, including eight at Heathrow, four at Gatwick, three at Manchester and other locations including Aberdeen, Birmingham, Bristol, Dublin, East Midlands, Edinburgh, Liverpool, London City, Luton, Newcastle, Southend and Stansted.
Most of the stores remain closed due to the Covid-19 pandemic, but Dixons Carphone has also blamed the ceasing of trading on the recent scrapping of VAT-free shopping for overseas tourists following the end of the Brexit transition.
Announcing the group’s latest trading update, the group said:
“We do not expect passenger numbers to recover sufficiently to compensate for the removal of airside tax-free shopping by the UK Government from January 1.
“This has led to the difficult decision to close this business, which historically made an annual profit contribution of over £20m.”
Despite the closures Dixons Carphone said that “Since January, trading has remained strong”, with “very strong online growth” – Group Electricals online sales have more than doubled to over £4.5 billion for the year.
Commenting on the news Airport Operators Association chief executive Karen Dee said:
“Amid the devastating impacts of the Covid-19 pandemic, the UK Government’s decision to remove airside VAT-free shopping as of January 1, 2021 is making a bad situation worse. The Government should urgently review this decision and reverse course before further damage is done.
“The UK is now the only country in Europe without airside tax-free shopping. Our European competitors get a Brexit benefit by being able to offer UK-bound travellers every opportunity for tax-free shopping while UK airports are left at a significant disadvantage.
“The closure of Dixon Travel stores and the loss of jobs shows the first real-world consequences of the Government’s inexplicable decision. These are unlikely to be the last.
“As a tentative restart of aviation draws closer, Government should be supporting revenue recovery for airports after the huge losses suffered by airports during the pandemic. Instead, the Government has left airports with one hand tied behind their back in the efforts to return to profitability.”
Last month a cross-party group of over 60 MPs and Peers wrote an open letter to the Chancellor of the Exchequer, calling for the introduction of duty free on arrival shops in British airports, international rail and ferry terminals.
The letter said that independent research from York Aviation showed that the move could increase passenger spend by between 20 and 30 per cent, and would “help our travel sector flourish and take full advantage of the UK’s EU departure”.