In significant breaking news Dixons Travel is to close its airport and cruise stores following a significant drop in passengers due to the Coronavirus (Covid-19) and the removal of airside tax free shopping in the UK, TRBusiness can confirm.

The announcement was made during a trading update from parent company Dixons Carphone on the morning of (28 April 2021).

A Dixons Carphone statement read: “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 this business, which historically made an annual profit contribution of over £20 million/US$27.8 million.”

TRBusiness has been informed that all 35 Dixons Travel stores will close. Twenty nine of these shops are located in the UK at airports including Aberdeen, Belfast, Birmingham, Bristol, East Midlands, Edinburgh, Glasgow, Liverpool, London City, London Gatwick (North and South Terminals) and London Heathrow (Terminals 2, 3, 4, and 5).

Dixons Travel will also close its two stores at Dublin Airport (Terminals 1 and 2) and two outlets at Oslo Gardermoen International Airport. Its cruise operations onboard P&O Cruises’ Ventura vessel will also terminate.

TIMING OF CLOSURES UNCLEAR

A Dixons Carphone Spokesperson confirmed to TRBusiness that the timing of the closures will be determined following discussions with the individual airports. The Spokesperson also revealed that Dixons Travel workers (around 400) will be offered additional roles across the Dixons Carphone group, which employs 32,500 people.

Shedding further light on the decision to close the Dixons Travel Airport stores, the Spokesperson commented: “The decision was primarily driven by the tax change [at UK airports]. Obviously, passenger numbers have been exceptionally low recently due to Covid-19, but they are starting to come back.

“What we have said, therefore, is that we don’t expect passenger numbers to recover enough to compensate for the loss of the tax free shopping. The VAT is a big driver of sales as you would expect in these stores and without that there is less of a reason to have them unfortunately.”

He added: “The closure of the Dixons Travel stores is a great shame within the context of the Dixons Carphone group as it could have been avoided, but that is where we are.”

Reacting to the planned Dixons Travel store closures, Francois Bourienne, Chair, UK Travel Retail Forum commented: “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.”

He added: “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.”

Last year TRBusiness launched its own ‘Keep tax-free sales at airports and the VAT Retail Export Scheme’ petition amid a wave of opposition to the Treasury and HM Revenue & Customs’ decision to axe the VAT Retail Export Scheme and the airside extra-statutory concessions from 1 January 2021.

The petition was launched in October 2020 and at the time of writing had 12,663 signatures.

To read the government response to the petition, click here.