The industry has called on government to extend business rate relief from small businesses to all retailers to help ease pressure on the high street.
In the autumn Budget this week the government announced it will cut the rates bill by one-third for businesses with a rateable value of less than £51,000 for two years from April 2019.
Chancellor Philip Hammond said it was an average annual saving of £8,000 for 90% of independent businesses.
However, many retailers and property experts have said the measures do not go far enough.
“A lot of the changes were aimed at smaller retailers which [helps] but it doesn’t change the unfair proportion of taxes paid by the high street,” said the executive chairman of one high street multiple.
“It is a small move in a very large debate, [Hammond] is unlikely to do anything to reduce the real burden.”
The CEO of one womenswear multiple agreed: “[Rates] will directly impact recommended retail prices. I don’t believe customers want to spend more unless the product quality has improved, so in this case the chancellor’s plans are not helpful.“A healthy omnichannel shopping experience that benefits customers, town centres, communities and brands needs investment. The government needs to enable, not further deplete resources.”
Helen Dickinson, chief executive of the British Retail Consortium, said the cuts to business rates were “not sufficient to enable a successful reinvention of our high streets”: “Retailers are in the midst of a perfect storm of technology changing how people shop, rising public policy costs and softening demand. Struggling high streets require a broader outlook to thrive, particularly given the majority of the UK’s 3.1 million retail workers are employed in businesses that will not benefit from this announcement.”
Independent retailers welcomed the cut but agreed town centres needed more help. “[The cuts] will help but it’s only going to have a limited effect because footfall is going to continue to drop in city centres,” said Darren Hoggett, co-owner of J&B Menswear in Norwich.
”It will be a respite, but ultimately [rates aren’t] the main concern.”
Simon Dowling, owner of Simon Dowling Bespoke in Reading, said the help for independents was “long overdue”: “Rent and business rates are the two main areas that need to be changed. Unless they are reduced, independents cannot be anywhere near a high street. The government needs to make town centres real destinations.”
John Webber, head of rating at property services company Colliers, branded the changes as “nonsense”: “It beggars belief that while businesses are set to face a £600m business rates bill rise in 2019, £200m of which will be paid by the retail sector, the chancellor thinks it’s enough to purely offer a giveaway to businesses who in most cases already receive small business relief and to do nothing to help the big retail employers.”
Keith Cooney, head of rating at Knight Frank, agreed: “Given the market and economic uncertainty there is a strong argument that the chancellor should have grasped the nettle and frozen the tax at the current level.”