As demand for Fortnum & Mason’s iconic luxury British produce continues to grow internationally – with overseas sales reaching £12.5million in the year to July 2024, accounting for ~5.5% of total revenues – cross-border commerce remains a strategic growth area for the heritage brand.

But, with fast-changing and unpredictable trade policies, the opportunity for international growth comes with complexities, Nataliya Schipka, Director of Finance at Fortnum & Mason, told audiences at NRF Europe.

Cross-border remains a strategic growth area

Speaking at a Big Ideas session alongside its global tax and duty compliance partner, Avalara, Schipka explained how the retailer was harnessing innovation to navigate the complexities of international taxes and tariffs.

Cross-border commerce is strategic growth area for Fortnum & Mason, Schipka explained, an area which has continued to grow in importance over the ten years that she’s worked at the luxury retailer.

As an iconic London brand with a rich 300+ year heritage and the holder of several Royal Warrants, international deliveries remain popular among overseas visitors and tourists. Meanwhile, cross-border commerce is also being driven by gifting of classic British fayre, including teas, biscuits and its famous hampers, to key growth markets including the U.S.

A heritage brand with future-facing operations

“Despite our heritage, Fortnum & Mason wants to remain future-facing and tries to operate in a modern way,” Schipka said. “We’re continually looking at how we meet the needs of customers, which is why we needed support in enhancing our international operations, including tax and tariffs.”

“International tax is only getting more complex and governments are constantly changing the rules, so it can be tricky to navigate,” she added.

“With every country having its own thresholds, filing requirements and interpretations of rates, this can be particularly complex for retailers, such as Fortnum & Mason, who sell food and drink goods overseas,” Avalara’s Head of EMEA New Business, Benjamin Faust, commented.

Tea, for example, can attract a zero VAT rate in one market, while being included in a reduced rate in another. This makes managing these differences at scale – and speed as international trade policies rapidly shift – not only highly complex, but risks becoming costly if compliance is not effectively adhered to.

Adapting to U.S. policy shifts

This tricky navigation has been felt particularly by Fortnum & Mason in its U.S. overseas operations in recent months. “We used Avalara’s specific tax skill sets and its automation to help us uphold compliance while also meeting customer demands,” Schipka added.

This included navigating the end of the de minimis threshold, which previously exempted packages valued at $800 and under from fees when entering the North American market. The end of de minimis means UK retailers now face reciprocal U.S. tariffs on low-value parcels or flat-fees of between $80-200 per shipment for the first six months.

The change, which was extended to include UK parcels in August, left exporters with little time to prepare. As the new rules came into effect at the end of August, retailers were still racing to adapt, prompting a +90% surge in online searches for ‘Trump Tariffs’ according to data from Flagship PR.

Trump tariffs risks price rises for U.S. consumers

Speaking to the FT this week, Fortnum’s CEO, Tom Athron, said that a combination of the end of de minimis and Trump’s stricter country of origin rules, risked raising prices for North American customers, which could, in turn, dampen the brand’s overseas sales.

With its iconic Royal Blend tea including tea leaves sourced from India and China – who now both face some of the highest country of origin U.S. import duties – it means “enormous tariffs apply,” Athron added.

Its loose leaf Royal Blend tea retails at $27.85 in the U.S., however, with tax and duties, it will now incur additional delivery fees, starting from $25.41 – almost doubling the price for some North American customers.

“It’s all in hand,” assured Athron, saying “logistically we’re immaculate, it just means prices will go up for U.S. consumers.”

Fortnum’s is no stranger to having to adapt to changing import regulations. In March 2021, it suspended deliveries to the EU following post-Brexit customs challenges.

Ongoing Brexit complexities meant the luxury retailer only resumed EU exports in November 2023, after a two-year+ hiatus. It was only able to resume EU trading after overhauling its operations, RTIH reported. This included new European warehousing, securing licenses to operate and overcoming complex shipping regulations on food products crossing the EU border.

Fortnum and Mason’s Nataliya Schipka was speaking at NRF Europe, the debut European event from NRF, which took place between 16 – 18 Sep 2025 at Paris Expo Portes de Versailles.