Leading lawyer urges Government to act now or
risk losing the high street
Encouraging more diversity and reviewing business rates are among actions the Government is being urged to consider to save the UK high street.
Debenhams, House of Fraser, BHS and HMV are among big-name stores who have suffered financial turmoil – or disappeared entirely – as retailers grapple with huge structural challenges. And the Centre for Retail Research estimates that more than 160,000 jobs could be lost in the sector this year.
Now Claire Barritt, a senior associate at leading law firm Prettys and an expert on commercial property, says it is time for the Government to act upon the findings in its own High Street and Town Centres 2030 report or risk losing the high street, as we know it, for good.
Ms Barritt said a number of factors were responsible for the demise of traditional stores including the massive growth in online shopping, high premises costs for traders, the development of out-of-town retail parks and lack of cheap car parking.
“The Government needs to deal with the business rates conundrum. High street retailers are paying larger bills compared to the mega retailers operating out of warehouses. Offsetting the loss of business rates income could be achieved by introducing suitable corporation tax bands so that higher turnover mega businesses could help make up for the reduction in business rates payable for high street locations and produce a fairer result for all retailers,” said Ms Barritt.
“Investment landlords could also offer far more flexible leases at more realistic rents, with tenant break clauses to encourage occupation of empty units. The amount of charity shops trading in high street locations could also be limited, as well as promoting more diversity in the high street by incorporating more non-retail businesses, such as gyms, play areas, hotels and student accommodation. Other things to consider include improving the appearance and attractiveness of local high streets to make them more appealing for consumers as well as making sure that any residential conversions are of high quality.”
Ms Barritt also highlighted how it may be necessary to make consumers more informed about the contribution of the high street. “It is important to educate consumers on the impact high streets have on local jobs, the economy and the environment. They need to understand if they don’t use it, they may lose it.”
Ms Barritt explained that the high street’s troubles have negatively affected investments in retail property.
“Currently the investment market in retail property is not particularly buoyant given the number of high-profile companies who have collapsed. While there are tenants out there prepared to pay high rents, who can blame landlords for wishing to maintain their profits?
“This has had a knock-on impact on business rates payable as most business rates are based on roughly half the open market rental value. To combat this, tenants need to negotiate more robustly, and be prepared to walk away if the lease terms offered don’t’ fit with their business plans.”
For more information on Prettys’ commercial property team get in touch with Claire Barritt by calling 01473 298335 or email email@example.com