Return of business rates will unleash carnage on the high street

Of course it’s right that retailers pay their share towards local services, and no one’s arguing with that. But there is a huge imbalance between what physical retailers pay and the minimal rates paid by the online giants on their warehouses. That might have made sense in 2015 when retail rents were at their peak and warehouses hadn’t become the epicentres of online retail they are today. But it doesn’t make sense any more.

There needs to be a levelling of the playing field between stores and online, which as well as reform of rates should also include a tax on online turnover to ensure the pure-play ecommerce giants are paying their share.

The irony is that, to their credit, many landlords are accepting the new reality, adjusting rents downwards and agreeing to new models like turnover rents. But they too are victims of the business rates system. They are seeing the value of some stores reduced to nothing, or even becoming negative, as the rates alone make occupying them prohibitive for any retailer, and then fall to the landlord.

It doesn’t have to be like this. When I travel to our international stores, I see them surrounded by flourishing independent retailers. That’s because unlike the UK, countries like Italy and France have a sensible system of taxation on retail property that encourages entrepreneurs.

I am still a believer in the future of stores. My view is that if you create attractive destinations filled with great product, then customers will come. I’m pleased that we are seeing early evidence of this at Superdry as the lockdown gradually lifts.

Source Article