News 10
Over 50 major retailers have come together to demand the Government takes action to fi x the broken business rates system. In a letter to the new Chancellor, Sajid Javid, heads of major high street retailers and retail industry associations, including Retra, Dixons Carphone and John Lewis Partnership, called on the Government to put business rates at the heart of the promised new economic package. Signatures on the letter,
which
was coordinated by the British Retail Consortium, come from CEOs of some big UK businesses, including the likes of Asda Stores, Boots,
Harrods, Marks & Spencer and Sainsbury’s, to name just a few. Retail remains the l argest private
sector employer in the UK, employing approximately three million people. The industry accounts for fi ve per cent of the UK economy, yet is burdened with 10 per cent of all business taxes, and 25 per cent of business rates. The letter asks for four fi xes that would address many of the challenges posed by business rates:
■ A freeze in the business rates multiplier; ■ Fixing transitional relief, which currently forces many retailers to pay more than they should;
UK CE markets look set to fend off Brexit uncertainty
The UK consumer electronics retail market generated £19.2 billion in 2018, with further growth of
four per cent expected this
year, even with the economic uncertainty surrounding Brexit. This is according to a new report from
Futuresource Consulting. Jack Wetherill, Principle Analyst, commented: “The UK CE market is based around 10 major product categories. It’s a mature market, with high penetration rates for established goods, and consumers keen to explore the leading edge of new technologies. “Within the categories, there are products at many different stages in their lifecycles, and the competitive and synergetic forces that come into play can be intense.” Across all product categories, 122 million units
were shipped last year, a decrease of around one million units when compared to 2017. However, 2019 will see the CE market remain robust, and although volume will continue to marginally decline, value will grow as consumers look towards premium products and nascent technologies. “Trends towards online and multi-channel or ‘click and collect’ retail models are continuing to reduce high street footfall, which can play a large part in bundling and upsell opportunities,” added Stephen Mears, Research Analyst at
■ Introducing an ‘Improvement Relief’ for ratepayers; ■ Ensuring that the Valuation Offi ce Agency is fully resourced to do its job.
The letter notes that implementation of these four recommendations “could be undertaken quickly, would reduce regional disparities, remove barriers to the proper working of market forces, incentivise economic investment, and cut away at least some of the bureaucracy of the current system”. “These four
fi xes would be an
important step to reform the broken business rates system, which holds back investment, threatens jobs and harms our high streets,” said Helen
September 2019
ertonline.co.uk
Retailers demand Chancellor to fix business rates
Dickinson OBE, Chief Executive of the BRC. “The new Government has an opportunity to unlock the full potential of retail in the UK, and the Prime Minister’s economic package provides a means to do so. “The fact that over 50 retail CEOs have come together on this issue should send a powerful message to Government.”
The letter comes after BRC- Springboard data showed that UK Vacancy fi gures had risen to 10.3 per cent, the highest since January 2015. Also, the recent BRC-KPMG Retail Sales Monitor showed the 12-month average sales fi gures dropped to their lowest level on record, at 0.5 per cent.
Futuresource Consulting. “Online now accounts for 25 per cent of all CE retail volumes in the UK, with multi-channel methods taking a further 37 per cent. Physical retail accounts for the remaining 48 per cent and is on a downward trajectory across all categories. Nevertheless, there are reasons for retailers to remain optimistic, particularly as there is a general consumer preference to physically interact with CE products prior to purchase. With the right multi-channel strategies, retailers can use this to their advantage.”
Drilling down into the categories, Futuresource expects newer technologies, such as wearables, OLED TVs, true-wireless headphones, smart speakers, and next generation games consoles to experience signifi cant growth in both volume
and value terms. These products will contribute an increasing amount to the CE market across the coming years, with newer, innovative products generating a value CAGR of 6.5 per cent for 2018 to 2022. Vendors, distributors and retailers face a situation in which they may be tempted to stockpile CE goods, in the hope of avoiding any immediate tariffs on imports in the event of a disorderly no-deal exit from the EU; furthermore increased customs checks could likely slow down the supply chain. The value of the CE market may be nominally
growing, but in real terms some of this value will be due to currency and price fl uctuations as the market adjusts to Brexit.
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