Some of the UK’s biggest supermarkets and department stores face a fresh wave of closures, according to industry leaders.
The British Retail Consortium (BRC) suggested that 400 large stores are at risk of closure if they were included in the Government’s new business rates surtax on premises with a rateable value over £500,000.
It said “like all of retail”, these stores were already under pressure from soaring employment costs, high taxes, and rising rates bills, driving the closure of 1,000 such outlets over the last five years.
The BRC said the retail industry accounted for 5% of the economy, yet paid more than 20% of all business rates bills
Large stores pay around a third of the total bill.
Leaders further warned that given the small profit margins that existed across retail – around 2% to 4% for food – a significant rise in rates for large stores would force these shops to raise their prices, employ fewer people, or even close their doors entirely.
The 4,000 large stores played a vital role in the economy by employing approximately one in three of the industry’s three million workers and, as anchor tenants, attracted footfall to shopping and leisure areas, supporting cafes, pubs and smaller independents around them, it added.
It is estimated that if all 400 at-risk stores were to close, up to 100,000 jobs could be lost and local councils’ business rates receipts from retail would fall by “well over” £100 million a year.
“Britain’s largest shops are magnets”
The BRC is calling on the Chancellor to use the autumn Budget to deliver changes “without simply shifting the cost onto larger stores – which would be massively damaging to our high streets”.
It suggested this could be done without cost to the public purse by removing those stores from the new higher business rates tax band and slightly increasing the rates to be paid by the remaining large properties like office blocks and other big commercial buildings, where business rates were a smaller share of costs and the knock-on impact on jobs and prices was lower.
BRC chief executive Helen Dickinson said: “Britain’s largest shops are magnets, pulling people into high streets, shopping centres and retail parks, supporting thousands of surrounding cafes, restaurants and smaller and independent shops.
“After years of rising costs, far too many stores have disappeared – leaving behind empty shells that once thrived at the heart of our communities. Four hundred more large stores could disappear if the Government forces them into its new higher tax band. This would mean up to 100,000 jobs lost, emptier high streets, and less revenue for the Exchequer.
“The Chancellor can back families, jobs and high streets this autumn, by excluding large shops from the new higher business rates tax band. This would not cost the Exchequer a penny, yet would help secure the future of 400 retail stores, and the communities they support, right across the country.
“But failure to act risks shuttering hundreds more stores, costing jobs, communities and the economy far more in the long run.”
