The UK government’s refusal to reinstate tax-free shopping to expand luxury spending and boost hospitality continues to cost jobs at Selfridges.

The high-end department store group is to make around another 70 staff reductions, this time at its head office, with its CEO Andrew Keith claiming the new set of redundancies had been caused by the government removing tax-free shopping for international tourists, The Times reported.

The latest job cuts comes nine months after its previous set of redundancies. It confirmed that store workers will not be impacted by the current job losses.

Selfridges said: “The continued absence of a tax-free shopping scheme in the UK has significantly impacted international sales. Our proposals mean making around a 2% reduction in our overall headcount.

“The proposed reduction equates to approximately 70 roles across specific head office departments. However, we hope to offer a number of those impacted redeployment opportunities.”

In a memo to staff, Keith added that the group “cannot ignore external headwinds”.

“The huge growth in online luxury that was widely forecast post-Covid has not materialised at the pace expected… we recognise a need to prioritise our tech and digital roadmap,” he added.

Selfridges isn’t the only luxury store to have suffered from the loss of VAT-free shopping with fellow UK brands Mulberry and Burberry also warning that the decision to scrap tax-free shopping to tourists has harmed the sector and led to weaker UK sales. Several reports have shown a sizeable group of shoppers switching their spending to France, Italy and Spain where tax-free shopping is still available. Even some UK consumers have chosen to shop abroad.