UK. Dixons Carphone is to close its airport business under the Dixons Travel name, citing the ending of airside tax free shopping by the UK government as a key reason.
In a trading update today, the company 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 1 January. This has led to the difficult decision to close the [Dixons travel] business, which historically made an annual profit contribution of over £20 million.”
The Dixons Travel network covers Aberdeen, Belfast, Birmingham, Bristol, Dublin, East Midlands, Edinburgh, Glasgow, Liverpool, London City, London Gatwick, London Heathrow, London Luton, London Stansted, Manchester, Newcastle and Southend airports. The company said it aims to find roles for its 400 staff at other group locations.
Reacting to the news, UK Travel Retail Forum Chair Francois Bourienne said: “When the Government took the decision to remove tax free shopping last year, the UK Travel Retail Forum told the Exchequer Secretary that the impact on airside retailers and airports would be profound.
“Sadly, today that impact has led to the closure of Dixon’s Carphone airport shops up and down the country, and the loss of airport jobs crucial to local economies.
“While we commend Dixon’s commitment to helping their staff find roles elsewhere, there is no escaping the clear negative consequences stemming from a completely avoidable decision by Treasury. Airports will not be able to replace this lost revenue immediately, and will now find it harder to invest in infrastructure, route development, and the recovery from COVID-19.
“UKTRF continues to urge the Government to reconsider its position to avoid causing further damage to UK businesses and UK livelihoods. It should move to reinstate airside VAT-free shopping before further damage is done.”