Bricks and mortar retail is having a hard time at present and the impact on our towns and cities cannot be underestimated.
Footfall on the High Street has fallen by 10% in seven years, sales figures are down, CVA’s abound and rent reductions are the norm hence retailers, landlords and ultimately the consumer all feel the pain.
The impact is clear with a spiralling number of vacant units - 16 stores are currently shutting every day across the UK with only 9 opening in their place. Online retailing, retailer relevance and increase in general business costs all play a part but the significance and impact of business rates on the decline has been a focus of the British Retail Consortium for some time, noting current rates already exceed rents for retailers in many locations.
Against this back drop and despite the declaration of central government to support our towns centres through interventions such as the Future High Street Fund and Towns Deals Funds, it has been confirmed that the business rate burden will increase by 1.7% next year in line with the Consumer Price Inflation figure for September.
Whilst retail accounts for only 5% of the UK economy, the sector pays 25% of all business rates and this inequality is increasing. Furthermore legislation aimed at easing pressure on the high street by more regular reassessment of business rates on commercial premises was abandoned after the government’s decision to shut down parliament.
The government needs to take further action to help reinvigorate our vibrant town centres. Small cash injections are not sufficient to create and maintain sustainable destinations that support the community if tenants/occupiers cannot afford to occupy the spaces. A freeze in the business rate multiplier is now vital short term and an overhaul of the system entirely must be on the agenda.
Retailers are having to move at the speed of light simply to stand still in this new world of increasing consumer choice and demand and the government must follow suit.