The high street is, arguably, going through the toughest period in its history.
More and more people are purchasing goods online, and this has led to numerous stores across the country closing down, resulting in mass job cuts, empty retail spaces, and a completely different shopping landscape.
Though numerous retailers reported an unexpectedly strong July, this was largely down to online sales performance and had very little to do with people going into actual high street outlets.
Given this downward spiral, which shows no sign of stopping or slowing, it would seem that a new tactic is required if the high street is to survive long into the future. Which begs the obvious question: is it inevitable that business rates will be cut in order to save physical stores?
Demands from the high street
For a number of years, retail experts and business gurus alike have been suggesting that business rates should be cut so as to breathe fresh life into retail outlets. This has, until now, been little more than a speculative suggestion.
However, in recent weeks, a number of the UK’s most prestigious and influential retailers have decided to take matters into their own hands. More than 50 leading outlets – including Harrods, Iceland, River Island and ASDA – have written to the government to ‘demand’ changes, specifically a ‘drastic’ cut when it comes to tax.
And, given that Brexit is liable to cause even greater issues when it comes to retail spend, such changes will likely have to be introduced relatively quickly – potentially prior to October 31 – so as to create the impact that is desired.
A chance to boost the economy
In the letter, the CEOs of the companies involved called on Boris Johnson to prioritise saving the high street, stating that it will be vital to inject new life into a sector that could help to bolster the economy following the UK’s exit from the EU.
While retail is currently going through a very difficult period, it remains true that retail remains the largest private sector in terms of employment. Retail still employs around three million people, however, it is estimated that it only provides around 5% of the economic wealth. And, despite this, it creates 10% of the businesses taxes and a whopping one-quarter of all business rates.
If business rates are cut – and this remains a massive ‘if’ – then the government will be able to assign more money to regenerate numerous failing high streets, and retailers will have more funds to spend on enticing people into their stores.
It would appear that a cut in business rates would provide numerous long-term benefits, but it remains to be seen if such a policy will be actually introduced.