New politics of retail

Website Editor • February 21, 2020
Less uncertainty makes sales  more certain!

The UK’s new political environment is going to be good for business says our survey and readers came up with interesting ideas to re-balance the high street/online markets in the face of “unfair” retail business rates.

Taken after the December election and the passing of the Brexit bill, 63% of our respondents expect consumer confidence to rise this year. Regardless of their own political views, a whopping 91% said a majority government was good for sentiment and 64% said the passing of the Brexit bill would help consumers move on and start spending.

But while 82% believe we have a pro-business Government, only 20% were confident that the forthcoming budget in March would see action to support retail. “We want the politicians to stop wring their hands and saying they will take positive action when we all know they won’t,” said a retailer in Hampshire.

Some 78% of our readers felt business rates were unfair to retail and 73% thought online sellers should pay additional tax. But two new ideas emerged from the survey. A respondent from Sussex said: “Maybe the only way to be fair against online retailers is to put up VAT on goods and abolish business rates completely.”

Another idea also focussed on VAT, but this time on deliveries. “Need to review the VAT treatment of transport,” said a retailer in Somerset. “Business-to-business net effect would be zero but would impact on deliveries direct to the public - no free delivery because always a cost -
all those small delivery vehicles are harming the environment and
clogging up roads.”

But in the online vs High Street debate, a reader in Kent was unequivocal. “If retailers have a problem with online then ‘join in’. It’s the will and want of the consumer, to be able to buy how and when they want. Retail needs to adapt to offer a modern shopping experience,” he said. 

The same reader added: “I don’t think business rates are the problem. It’s the rents that are the most painful” and a London retailer blamed “greedy landlords” in the region. In our survey, rates and rents came out about equal when we asked which was the greater burden.

Staff costs and increases in the national minimum/living wage were flagged as a concern by only 9% of our readers though 79% expressed no intention to increase staffing in the year ahead.

The theme of ‘cautious optimism’ that has been commented on elsewhere by retail analysts comes through in our survey. A healthy 70% believe retail decline is reversible in the UK and 63% think that flooring is a more retail resilient sector than most.

Let’s see what comes through in the new Chancellor’s budget in March...

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