Selfridges sales drop amid weak consumer confidence and drop in tourist spending

Selfridges has attributed a decline in annual sales to a drop in international tourist spending on luxury goods in the UK, alongside a general weakening in consumer confidence.

The British department store chain reported a 7% drop in sales for the 48 weeks to 4 January 2025, totalling £774.6 million - down from £834.9 million over the 53-week period the previous year.

Despite the sales dip, losses narrowed significantly to £15.9 million, compared with nearly £41.9 million the year before. However, the group has not recorded a pre-tax profit since 2019, before the COVID-19 pandemic forced widespread store closures.

The retailer said it continues to suffer from the UK Government’s decision to end tax-free shopping for international visitors - making the country a less appealing destination for high-spending tourists. As a result, wealthy travellers are increasingly opting to shop in cities such as Paris and Milan, where tax incentives still apply.

Additional headwinds cited by the company include disruption to supply chains caused by ongoing global conflicts and delays along key shipping routes. Rising prices for luxury goods and persistent cost-of-living pressures have also weighed on performance.

Inflation and elevated energy costs have led consumers to curb discretionary spending, which Selfridges said have "undermined consumer confidence to spend on luxuries and non-essential items".

The reporting period also marked a major shift in ownership. In October 2024, Saudi Arabia’s Public Investment Fund acquired a 40% stake in Selfridges for an undisclosed sum, adding the retailer to its growing portfolio of international luxury department stores.

The stake was previously held by Austria’s Signa Group, which, alongside Thailand’s Central Group, purchased Selfridges for £4 billion in 2021. Central Group assumed full control last year after Signa filed for insolvency.