400 of Britain’s largest shops at risk, BRC warn

The British Retail Consortium (BRC) is warning that 400 large-format stores, from department stores to supermarkets, are at risk of closure if the Government forces them into its proposed higher business rates tax band.

New research from the BRC reveals that large stores would be at risk if they are included in the Government’s new business rates surtax on premises with a rateable value over 500,000 pounds.

There are currently approximately 4,000 large-format retail stores in the UK with a rateable value over 500,000 pounds, and the BRC states that “like all of retail,” these stores are already under pressure by soaring employment costs, high taxes, and rising rates bills, which is why 1,000 larger stores have closed over the last five years.

The BRC adds that the retail industry accounts for 5 percent of the British economy, yet it pays more than 20 percent of all business rates bills, with large stores paying around a third of the total bill.

Given the small profit margins that existed across retail, around 2 to 4 percent 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 BRC warned.

The 4,000 large stores played a vital role in the economy, adds the BRC, as they employ approximately one in three of the industry’s three million workers and, as anchor tenants, they attract footfall to shopping and leisure areas, supporting cafes, pubs and smaller independents around them.

The BRC anticipates 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 pounds a year.

BRC calls on the Government to rethink business rates, which could put 100,000 retail jobs at risk

Ahead of the Chancellor’s autumn budget, the BRC is calling on the Government to deliver changes “without simply shifting the cost onto larger stores – which would be massively damaging to our high streets”.

It suggests 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 are a much smaller share of costs and the knock-on impact on jobs and prices is far lower”.

Helen Dickinson, chief executive of the BRC, 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.”