200 Boots stores at risk of closing
Shops ‘under review’ after £144m bill for business rates
BOOTS may close over 200 shops after warning that crippling business rates are piling pressure on the high street.
The chemist has placed the stores ‘under review’ with insiders saying a large number are likely to shut.
The news comes just days after the company’s boss called on ministers to reform ‘unfair’ business rates.
Boots is one of Britain’s largest retailers, with about 2,500 shops and 56,000 staff. Its business rates bill was £144million in 2018 on sales of £6.8billion. By contrast, web behemoth Amazon paid just £63.4million on sales of £11.5billion. The Daily Mail has called on the Government to strike a fairer balance between physical and online shops with our Save Our High Streets campaign.
Boots joined other big companies to urge ministers to reform the system after a ‘bloodbath’ of shop last year saw 93,000 jobs lost.
The chemist is owned by the US group Walgreens Boots Alliance. The shops under threat are in areas where Boots has more than one store – or has leases about to expire. The review, thought to affect more than 200 shops, is set to last 12 to 18 months.
Boots boss Sebastian James told MPs on the Treasury Select Committee last week that business rates – based on how much a company’s properties are worth – were ‘a real problem’.
His appearance came as several well-known retailers prepare to close shops this year, including Debenhams, New Look and Sir Philip Green’s Topshop. Mr James said: ‘We do not have to look very far to see that some names that have been on the high street for decades – if not hundreds of years – are closing their doors, going into administration...and most of them will cite property costs.’
Mr James also revealed Boots had lodged appeals against business rate bills nine years ago – but had yet to receive any rulings from the Government.
He said the current rates system should be replaced with a levy on sales reported by retailers, echoing a proposal made by Tesco boss Dave Lewis.
Speaking to MPs alongside Mr James, John Lewis property boss Chris Harris added: ‘There needs to be action now. There has been an unprecedented change in the high street very recently and the business rates system is cumbersome and slow to react to that.’
Helen Dickinson, of the British Retail Consortium, said yesterday: ‘Our business rates system imposes huge costs on firms regardless of whether they are in profit or in loss. This is neither fair nor sustainable.’
Chancellor Philip Hammond last year announced £900million worth of business rates relief but this has been dismissed by critics as ‘tinkering around the edges’. Last night a Boots spokesman said: ‘We currently do not have a major [closures] programme envisaged but, as you’d expect, we always review under-performing stores and seek out opportunities for consolidation.
‘We are being realistic about the future and the fact that we will need to be agile to adapt to the changing landscape.’
WH Smith has been named the worst chain on the high street yet again. It finished bottom of a survey by consumer group Which? – and has now been in the bottom two for nine years in a row. Richer Sounds came top.