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Government ‘in denial’ over high street crisis, say retailers

The government is failing “to face up to the reality” of business rates and the decline of the high street, retailers have said, following the publication of the second Grimsey report today.

Multiple and independent retailers told Drapers a lack of innovation, communication and action to boost footfall and alleviate the burden of business rates is damaging Britain’s town centres.

Oliver Tress, founder of Oliver Bonas, said business rates remain a key problem: “The elephant in the room is business rates and the government has no appetite to go somewhere else to raise the money.

“Bricks-and-mortar sales are dropping by a few per cent year on year. It is a rather slow-moving animal but we are going to have to come up with an idea of how to keep stores open in the future.”

The chief executive of one menswear multiple said: “I agree with the Grimsey report, the rating system is archaic and needs to change. The effect of closed shops on the high street can raise social problems when you have empty [units].

”At the end of the day retailers can only afford a certain amount of property costs, and in many cases the rates make it prohibitive.”

Matt Horstead, owner of Dartagnan Menswear in Chichester, agreed: “Business rates are a conversation we have every day. I have been doing this for 21 years and even now nothing has been done about it – there’s not been a major change.

“The impact [of big high street closures such as House of Fraser] could be massive. It will drive people online and out of the city centres. Local councils have to face the issue head on. If they want to have a successful, thriving city, they need car parks and businesses full up – they can’t have swathes of empty units in a city centre.”

In the report, published today, Grimsey said business rates were an “outdated and unfair” tax that was in need of a “major overhaul”.

He added retail can no longer be the basis of successful high streets – instead they must incorporate health, housing, arts, education, entertainment, office space and “some shops”.

Bill Grimsey

Bill Grimsey told Drapers the government was keen to tackle the issues

Grimsey told Drapers the government was keen to tackle the issues: “Compared with five years ago [when Grimsey published his first report] there is an appetite in Westminster and at local-authority level to tackle this. At the launch [of the report] with the Local Government Authority [today] the fringe meeting was packed with delegates willing to listen.

“Jake Berry [minister for high streets] is certainly listening and I sense that this time around we may get some action.”

Grimsey told Drapers Berry has promised to examine the report’s 25 recommendations to save the high street this summer, and will create an action plan to tackle issues facing retailers and councils.

Debra McCann, owner of independent The Mercantile, in London, said adapting retail to fit more of a community need may offer a lifeline for many high streets.

“It is very difficult in this discount mentality to bring people into the hub of the store without offering an incentive but some do it.

“Gerrards [fashion store] in Reigate is a community hub. They have these evenings where people come into see the new collections. I know of book shops that do book readings, host galleries and act as a creative hub.

“There is no incentive to share knowledge. We are sharing enough on social media but we [retailers] are not sharing ideas with each other enough.”

Steve Cochrane, owner of independent store Psyche in Middlesbrough, echoed the need for community hubs, particularly in regional towns: “We’ll end up with very few shops left – 50% of sales will be online and communities will massively suffer. If you haven’t got shops or places to browse, then a community will suffer and die. They can’t go back to be purely residential.”

The managing director of one large multiple said retailers also have a responsibility to the communities they reside in: “Many retailers increasingly want regimented footprints as it makes it easier to open store, but with that you end up with a homogenised retail offer with no character [which isn’t good for town centres].

“Also, when you have the anchor store in a town centre store go, it hits the psychology of the town centre.”

The Grimsey report noted a changing high street footprint that has accelerated in recent years. Local Data Company has documented the closure of 1,588 women’s clothes stores, 861 shoe shops and 698 fashion shops between 2013 and 2017.

During the same period 981 large chain coffee shops, 1,384 independent cafe and tea rooms and 2,090 tobacconists/e-cigarette stores have opened.

Readers' comments (1)

  • This is made worse by the ripple effect of BREXIT.

    Government is so focused on negotiations, other key issues, such as this one, are not getting the management time and urgency it deserves.

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