Report states urgent action needed to level playing field between online and high street retailers
In the wake of a particularly difficult 2018 high street retailers inside and outside the mobility market, a new report published by the Housing, Communities and Local Government Committee has stated action is needed immediately to save the high street and support physical retailers as online retail grows.
Stating that an enormous change has taken place in retail in recent years, with growth of online shopping significantly changing consumers’ shopping behaviours, the High streets and town centres in 2030 report highlights the impact has been numerous, sustained store closures and falling footfall in British high streets.
Urging local authorities, central government, retailers, and landlords to work together to help create a new approach for the high street in the coming years, the reports makes recommendations designed to bring about a vitally needed change over the next decade.
In particular, the report notes that “high street retailers are paying more than their fair share of tax, while online retailers are not contributing enough,” comparing Amazon UK’s business rates amounting to approximately 0.7 percent of their UK turnover to that of high street retailers’ business rates as a proportion of turnover ranging from 1.5 percent to 6.5 percent.
Pointing out that the introduction of a Digital Services Tax due to begin in April 2020 does not address the imbalance between online and high street retailers, the Housing, Communities and Local Government Committee asserts the “Government needs to go further and move faster to level the playing field between online and high street retailers.”
To create a fairer trading environment for high street retailers, the report suggests that the changes in business taxation, including the introduction of an online sales tax, should be used to support retailers with a reduction in business rates for retailers in high streets and town centres, as well as a 12-month holiday for high street retailers from rates increases which result from investments to improvements in property.
As well as support from central government, the report notes that high street retailers must also change and adapt in order to survive and thrive on the high street, pointing out that retailers must use their physical retail space and their staff to create unique opportunities unavailable online.
In the mobility industry, this recommendation is particularly apt, with the rise in the powered mobility accidents and vulnerable consumers purchasing products not suitable for their needs online emphasising the importance of assessment for many of the products sold by mobility stores.
The report advises that in addition to being well-stocked with interesting products, retailers should consider providing personal shopping services, advice and consultations, effectively using social media and investing in staff training and the store itself.
Highlighting high street store opening hours as an area where the high street has failed to adapt to improve convenience for shoppers, the report says retailers should conduct research with its customers to discover the best operating times and adjust to meet their needs.
As well as calling on central government to provide economic support to retailers and for retailers to be more adaptable to consumers’ needs, the report states local authorities need to take a leadership role, using money available in the new The Future High Streets fund with a clear, strategic plan to revitalise high streets and create more community-based events to encourage higher footfall.
In addition, landlords need to provide more flexible agreements to its retail tenants and address high rents by outlawing the use of upward-only rent reviews which no longer reflect the market.
The report warned unless urgent action is taken, the Committee fears that further deterioration, loss of visitors and dereliction may lead to some high streets and town centres disappearing altogether.