To compete in a global retail environment, British retailers urgently need to make significant investment in IT systems and technology to drive multi-channel, international growth and offer personalisation across all channels.
David McCorquodale, Head of Retail at KPMG, comments on today’s announcements in the Autumn Statement affecting the retail sector:
“Today’s capping of business rates may seem welcome but it is not enough. Rates have become one of the retail industry’s biggest costs and biggest burdens, outpacing rents, revenue growth and curtailing the amount retailers are able to invest back into their business. A cap rather than a freeze still means a rise in costs."
“For five years the industry has been overtaken by technology advances and is rapidly moving online. To compete in a global retail environment, British retailers urgently need to make significant investment in IT systems and technology to drive multi-channel, international growth and offer personalisation across all channels. An increased property cost burden hardly helps to keep retailers on the high street."
“The re-occupation relief and the business rates relief for small retailers is welcome but support for the smaller independents needs to encourage diversity and the growth of small businesses, rather than a subsidy to zombie retailers who are no longer relevant."
“Realistically we need the retail space on the high streets to be shrunk. We cannot push back the tide of the internet and drastically need to allow change of use for many of the vacant sites and bring life back to the high streets. The Government’s stated intention to have a more flexible planning system in the future will play a vital part in this."
“Whilst capping the rates may be coloured as saving retailers up to £91 million a year* what's really needed, is an urgent re-think and overhaul of the business rates system, which is simply no longer fit for purpose. Only a full top to toe review will deliver a long term solution and allow the industry to move with the times. This should be done in 2014, not 2017.”
*Source: The British Retail Consortium
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This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.