Retail Reflections: It’s grand up north; business rates and another ‘save the high street’ campaign

Alan Monahan writes: And so to Harrogate.

Next week I will be happily heading to the Home & Gift Buyers’ Festival in the spa town as I have done for the past 23 years.

Driving to North Yorkshire, my spirits will be lifted as I re-enter the time warp that is Harrogate in the knowledge that little will have changed.

To my untrained eye, everything will look as it has always done: quaint shops, an abundance of hotels and hills to test the resolve of buyers in search of food and drink at the end of a busy day trawling the show.

The sun will, of course, shine; the jazz band will play and people will moan that it’s ‘too bloody hot’ in the halls.

And for their love of times past and delicious cakes, visitors will flock to Betty’s tea rooms as they have done for nearly a hundred years. This is the place where exhibitors and buyers alike delight in an atmosphere reminiscent of a bygone era. They say that nostalgia isn’t what it used to be, but that isn’t the case in Harrogate!

And that’s why I love the place.

It’s corny but true that Home & Gift really is a show where doing business is a pleasure. Going to North Yorkshire is a temporary escape from the daily grind that sees not a few buyers fighting for survival. For some, it is much-needed respite.

This is the place where they can gain solace by chewing the fat with fellow retailers – sharing experiences, picking up tips and finding out that they are not alone in an increasingly competitive environment.

‘Is that product still on-trend?’; ‘Am I stocking the right ranges?’; ‘Do you have a real shop or only sell online?’; ‘Have you appealed your business rates?’

I would offer a couple of tips to those of you attending the show for the first time, especially if you are travelling some distance:

1. Do try to spend more than one day there. Unlike most other trade fairs you may have experienced, suppliers and visitors here are happy to dally on stands even after their business has been concluded. Nobody is in a rush. So, make sure you allocate enough time to see your favoured exhibitors because, chances are, they’ll be busy when you go calling.

2. The Harrogate social scene is lively, to put it mildly: hangovers are not uncommon. And although there are scores of restaurants, as well as bars and pubs, in the centre of the town – Thai, Indian, Chinese, Italian, et al – the majority are extremely popular, so book a table or you run the risk of having to wait or being disappointed.

Whether you’re buying or selling in Harrogate, I do hope that you find it financially and spiritually rewarding. And if you see me around the fair or out and about in town, please say hello!

Further afield, a Supreme Court ruling means that US states will be able to force online shoppers to pay sales tax. More than 40 of them had asked the court to overrule two decades-old decisions that they said made it difficult for them to collect tax on certain items, which resulted in the loss of billions of dollars in revenue each year.

Here in the UK, the Daily Mail has seen a letter from Chancellor Philip Hammond suggesting online retailers could soon be subject to their own tax system as he seeks a better way of taxing the digital economy in order to reduce the advantages they have over retailers with physical stores.

And although he admitted that the high street was being hit too hard by business rates, an overhaul seems unlikely as Hammond believes the way they are charged supports the stability of local government funding. And, here we go again, Treasury select committee chair Nicky Morgan MP says it is likely they will scrutinise business rates as part of their Autumn Budget inquiry later this year.

The Centre for Retail Research (CRC) has revealed that the average high street shop pays 2.3% of turnover on business rates, compared to 0.6% paid by their online rivals.

With around 50,000 retail jobs lost in the first half of this year, Joshua Bamfield, director of the CRC, has described the figures as ‘scandalous’. He is right, of course, and although we have had lots of promises of reform from politicians they have done little to alleviate the situation.

The Daily Mail has launched a campaign to save Britain’s high streets, claiming that Amazon pays just £14 million a year in business rates for its 13 enormous warehouses, while Marks & Spencer – with sales a third bigger – attracts a rates bill of £184.2 million. This is more than 12 times as much as is paid by the online giant. However, an Amazon spokesman said that it had more than 100 buildings in the UK and the rates figures for the 13 warehouses were not representative of its total bill, which he would not reveal.

Perhaps the Mail should get together with the British Retail Consortium (BRC) and all the other organisations that have been addressing this problem.

There’s another one on the scene, the New West End Company, which represents 600 retailers, hoteliers and property owners in central London. It wants to partially replace business rates with a 1% tax on firms with sales that are ‘wholly or largely online’.

Instead of individual appeals to the government to do something, coming together would give us a campaign with clout. The retail industry surely deserves that. It is the UK’s largest private sector employer, makes up 5% of the economy and pays nearly 25% of the overall business rates bill – over £7 billion a year.

BRC chief executive Helen Dickinson says this is a disproportionate burden and is leading to decisions to close stores, while at the same time getting in the way of the modernisation and reinvention of our high streets.

Meanwhile, the BRC is calling for a two-year freeze on business rates increases to provide some relief for the retail industry at a time when it is under significant cost pressure and going through a period of transformation driven by technology and changing consumer behaviour.

Her point is well made, but this and other ideas are best pooled and a co-ordinated plan involving retailers presented to decision makers.

In the meantime, and if I haven’t already missed it, what about a petition to revolutionise the business rates system?

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1 thought on “Retail Reflections: It’s grand up north; business rates and another ‘save the high street’ campaign”

  1. I imagine Harrogate will weather the Brexit storm better than most towns.

    Here in Cambridge – another town you would expect to weather the storm well – I see more abandoned shops appearing.

    I wonder about the taxation of the digital economy. It consists of many very small businesses precisely because the bar to entry is so low.

    I suspect that trying to tax small online businesses would be a costly exercise for little gain.

    All analogies fall flat at some point, but in the USA they think the idea of businesses paying rates and shoppers paying for car parking is counter productive.

    Better to do away with rates and parking costs – and see how the High Street manages.

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