Business rates hike ‘has been a real killer’ for retailers, claims boss
THE BOSS of toy retailer The Entertainer has condemned Britain’s soaring business rates, saying the Government must take some responsibility for casualties on the high street.
Founder Gary Grant said last year’s rate hike had been a “real killer” for retailers by heaping financial pressure on firms already suffering from squeezed margins.
While pressures from rising inflation and the National Living Wage have hit retailers, Mr Grant said business rates remain “the elephant in the room”.
Speaking to the Press Association, he said: “Landlords are being very realistic about their rent, but the one thing that is not negotiable are business rates.
“(The retail sector) is seeing many stores empty for long periods of time and the biggest issue is that (retailers) can’t open stores. Business rates are out of line now with retail turnover. Business rates are the real killer. Any increase in cost where you have flat and declining turnover is going to put pressure on the bottom line.”
Such has been the challenge for other retailers that a restructuring process known as a company voluntary arrangement (CVA) – which allows firms to negotiate discounts on rents and close loss-making stores – has become the go-to lifeline.
New Look has shut 60 stores through a CVA, while Carpetright is pursuing a similar strategy that could see it close another 81 stores and tap investors for £60m.
Toys R Us announced a CVA at the end of last year in an attempt to shore up its financial position, but it failed to find a last-minute buyer and succumbed to administration, sparking more than 2,000 job losses.