Retail body argues for early return of non-essential retail as lockdown costs sector £22bn

High Street retail lockdown costs
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Action on rates, rents and grants is essential to drive non-essential retail recovery and provide the support to kick-start the broader economy. And that must include the high street amusements and leisure offerings.

 

The British Retail Consortium has made a powerful case for lifting the restrictions on non-essential retail at the earliest opportunity alongside a robust programme of financial assistance to get the sector back on its feet.

According to figures released by the BRC, 2020 was the worst year on record for retail sales growth with in-store non-food declining by 24 percent, year-on-year. The results have also been reflected in footfall, which was down by over 40 percent in 2020.

The BRC calculates that the three lockdowns cost ‘non-essential ’ retail – an estimated £22bn in lost sales. Furthermore, tighter restrictions in the crucial run-up to Christmas hampered retailers’ ability to generate the turnover, which would have helped power their recovery in 2021. Retailers contributed £17bn in business taxes in 2019, collecting a further £46bn in VAT. A strong retail sector, claims the BRC, is essential to ensuring these future revenue streams for Government and local councils, revenues which are vital for supporting local communities.

Ahead of the 3 March Budget the BRC is calling for action on rates, rents and grants which, it argues, is crucial to the recovery of ‘non-essential’ retailers preventing the further loss of thousands of jobs in communities across the country.

The BRC’s wish list includes an extension to business rates relief for the worst-affected businesses to reduce the unsustainable cost burden on retailers, giving them a fighting chance to continue trading, employing staff and serving their communities.

In terms of rents, it is seeking an extension to the moratorium on debt enforcement to support thousands of retailers who face accumulating rents even while venues are unable to trade due to Government restrictions.

The BRC is pressing the Chancellor to reverse the decision to apply EU state aid limits to lockdown grants alongside what it describes as “bureaucratic restrictions” stopping businesses receiving vital support funds.

These short-term actions will be crucial to allowing ‘non-essential’ retail to survive through a prolonged period of closure, avoiding administrations, shop closures and job losses.

BRC chief executive Helen Dickinson OBE said: “After 2020 proved to be the worst year on record, it is essential that the Chancellor uses the Spring budget to support those businesses hardest hit by the pandemic. Vital support in the form of an extension to the business rates relief and moratorium on debt enforcement, as well as removing state aid caps on Covid business grants, would relieve struggling businesses of bills they cannot currently pay and allow them to trade their way to recovery.

“Tackling the challenge of Rates, Rents and Grants should be the Government ’s immediate priority to ensuring the survival and revival of non-essential retailers and protecting the jobs of hundreds of thousands of retail workers across the country. The investment we provide to retailers now, will be repaid many times over through more jobs and greater tax revenues in the future.”

 

Sascha Blodau: Think creatively and think big to save the high street

 

Sascha Blodau, General Manager Gauselmann UK, believes the high street is in need of a two-step intervention from the government.

Sascha Blodau
Sascha Blodau, General Manager Gauselmann UK,

He explained: “All of the interested parties led by organisations such as the British Retail Consortium, agree there is an immediate need to ensure financial stability in order that retailers can survive and come out the other side. The ‘here and now’ is all about survival and doing whatever it takes in terms of commercial rents and rates to assist businesses to get back on their feet – because the damage which in the last 12-months has comprised 15,000 shop closures and a resulting 176,000 job losses, is considerable and there for everyone to see.

Businesses that are shuttered and the record number of vacant properties, stifle investment and there is a very real danger that we will see the creation of economically inactive ghost towns at a time when we need to give the population reasons to venture out of their homes.

At the same time everyone who has an interest in the high street needs to be thinking about the mid to long-term. The pandemic has accelerated online retailing by 5-years. Online delivery times are getting shorter and shorter and there are some age demographics who will not even consider visiting the high street. Add to this some really significant behavioural shifts such as ‘Working From Home’ – which has impacted high street weekday footfall, and you get an idea of the scale of the challenge.

All parties, including government, need to think creatively and think big. We need an overhaul of business rates to make bricks and mortar retailing viable, we need a joined-up public transport system that’s both cheap and efficient and remedy those issues that matter to people such as the costs of parking – which in many parts of the country are prohibitive.

Above all, we need a vision for what a more leisure oriented high street could look like with a mix of imagination and government support. The conversations we are having with our 144 constituency MPs are about our contributions to local economies and the importance of having healthy businesses trading on the high street. Once retailers have navigated this crisis it is clear that we require a root and branch review of how we sustain our town centres and make them relevant.”

 

Rates relief: ‘English and Welsh governments should take note” as Scotland sets the pace says Bacta

 

How responsive have you found the government – and those in Scotland and Wales – to assisting the amusements industry with rates, rent and grant support?

John White: For the FEC sector the support across all three countries has been forthcoming – the only problem was grants were initially not available to businesses with an RVC over £51k. We had a tougher time with AGCs but were ultimately able to lobby successfully for relief and grants in England and Scotland.

In Wales we continue to encounter resistance. Our supply chain members have received no help other than the CJRS despite being just as badly affected as their tourism and hospitality sector customers. Only recently has money been made available for the supply chain but it is so little it hardly registers as support.

How precarious are our businesses and how important is this package of support?

JW: I cannot overstate just how vital the support packages have been in keeping businesses hanging on. Not all will make it and as I have said our supply chain has probably got the last fingernail of their last finger still on the cliff face.

As our recent survey of members showed with income down between 50 percent and 70 percent and costs continuing at in excess of 50 percent there is no sustainable way of maintaining the status quo.

We have to have more support. We know it works – whilst between 10-15 percent of our workforce has sadly had to leave the sector, with CJRS this would have been 50 percent.

What are your main concerns for our sector and is action on rates, rents and grants the solution or just part of it?

JW: Employee and premises costs are two of the biggest expenses for any business.

The CJRS has addressed the first and rates relief the second. We have lobbied hard for the extension of both and I was pleased today to see that the Scottish Government has listened and extended the rates relief for our members for a further 12 months. That will be a great help to these businesses.

English and Welsh Governments should take note.

 


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