Slash business rates to save out high street
Outside of Britain’s biggest city centres, the high street is dying on its feet.
Governments, both national and local, do not seem to recognise that we are still a “nation of shopkeepers”. Indeed, the sector comprises around 95,000 firms, uses £326bn of gross assets and borrows £65bn each year.
Nevertheless, outside of the big cities that have received heavy investment, retail is struggling.
Locally owned enterprises are being replaced by betting offices and chains of cheap fast food outlets.
Ironically British consumers are now rediscovering the benefits of shopping local. Supermarket giants, led by Tesco, have capitalised on the trend by opening local branches. Wm Morrison even plans to open 100 stores nationwide.
But the local influx of big grocers has not created more variety. Small shops are often unable to compete and buckle under commercial pressure.
The rise of online shopping has also played its role in the destruction of variety on the high street. Small fashion boutiques must compete with internet success stories such as Asos and Net-a-Porter. Music, book and electronics chains including HMV, Borders and Comet have been wiped out by Amazon. Book shops double as coffee houses and internet cafes to survive.
Even the bigger beasts of retail are struggling to find new models so as to use space more effectively.
Kingfisher, owner of B&Q, is giving over up to 25 per cent of its floor space to grocers such as Asda.
We must now find a way of bringing the high street outside of big cities.
Bill Grimsey, founder of Wickes, has recommended that the motorist be turned from enemy to friend by removing meters and mobile-phone paying slots.
Others are convinced that high business rates on property are holding back the UK high street. The rates have climbed by 22.5 per cent over the last five years while bricks and mortar sales have gone up by half that.
A business rates review is needed, but in the interim councils could offer a break of say a 50 per cent reduction on shops empty for more than a year.
Property owners have adjusted to new conditions by ending the practice of upward only rent reviews and long leases, introducing far more flexibility into the retail model. Councils needs to think in the same way if shopping parades are to be revitalised.
Alex Brummer is City Editor of the Daily Mail