It's probably not VAT-specific and not necessarily done for the advantage of the retailers. At least, I understand the concept of duty-free stores to be that the retailer doesn't have to collect tax, so they can make the customer's overall price lower, and the customer can dodge import tax by either consuming in the airport or being below tax-free value thresholds. On the other hand, in this article one retailer claims it's a "practical impossibility" to have duty-free prices, so maybe they're all gaming the customer.
Edit: Apparently it has something to do with VAT: http://www.telegraph.co.uk/travel/travelnews/11794109/The-re...