Posted on 16 August 2010.
Heathrow airport the worst in Europe for tax-free discounts
London’s Heathrow airport offers the worst tax-free discounts in Europe, according to a survey by shopping comparison website Kelkoo [see footnote].
More than half of UK consumers believe tax-free airport stores offer average savings of 20% or more compared with recommended retail prices on the high street.
But the Kelkoo report reveals that departure lounge retailers are charging prices that are, on average, only 6.2% cheaper, with Heathrow offering the worst overall discounts of any major European airport, at just 3.1% less than high street prices.
Consumers spent more than £2.5bn on tax-free shopping in European airports last year, saving £168m against high street prices. But Kelkoo calculated that had the same consumers shopped online they could have saved on average a further 6.1% or £156m – a total discount of 12.3% or £324m.
In a mystery-shopping exercise, the prices of a sample basket of 22 products, spanning the key categories of health and beauty, luxury, fashion, electricals, wine and spirits, tobacco, fine foods and confectionery were collected in 10 tax-free retail airport outlets, and compared to prices online and benchmarked against the average RRP in local high-street stores. The 10 airports selected account for 80% of European passenger traffic.
Kelkoo found that prices varied by hundreds of pounds between airports. The cost of a Panasonic FZ38 digital camera ranges from £267.85 in Heathrow to £137.58 in Lyon, while a Dolce and Gabbana ‘Hobo’ shoulder bag cost £1,020 in Heathrow and £696.07 in Rome.
The variation was proportionately just as big for cheaper items: a box of Guylian Belgian chocolate sea shells cost £4.83 in Frankfurt airport, but almost twice as much in Amsterdam Schiphol where the same box would set you back £8.42.
Berlin Schönefeld offered the second worst discounts at 4.6%, while Gatwick ranked fifth with below-average savings of 5%. British airport retailers are the most expensive for luxury, fashion and electrical goods while Spanish airports charge the highest prices for health and beauty products – wine and spirits are the most expensive in French airports.
However, the best savings overall were offered by tax-free retailers in two french airports – Lyon-Saint Exupéry (11.9% savings) followed by Charles de Gaulle in Paris (11.5%).
However the UK topped the table when it came to online shopping, offering average savings of 15.4% compared with high street prices. France came second with savings of 13.7% while Italy came last out of six countries with savings of 9.1%.
Bruce Fair, managing director of Kelkoo UK, said: “Eleven years on from the end of duty-free there is still the perception that tax-free shopping offers the best deals. In reality, higher overheads, decreased competition and less choice means that tax-free shops are not always the hunting ground for bargains that people think they are. In fact, airside retailers simply cannot compete with online retail for the best prices.”
Tax-free shopping, which is free of VAT for travellers whose journeys start and finish within the EU, should not be confused with duty-free shopping which is free of VAT and excise duty. Duty-free was abolished by EU member states in 1999 and is now only available to travellers starting or ending their journey outside the EU.
• This footnote was added on 2 September 2010. Kelkoo has apologised for some inaccuracies in the data provided by the Centre for Retail Research (CRR) on which their report was based.
guardian.co.uk © Guardian News & Media Limited 2010