A radical approach is being proposed by leading property consultancy, Colliers International, to provide immediate support to the retail sector which is being severely impacted by COVID-19.
The five-point plan is aimed at helping retailers survive, while enabling landlords and investors to help keep their operators afloat, so that eventually, once normality resumes, businesses can continue trading.
The proposals are a response to the havoc that has been wrought on the sector by COVID-19, major increases in business rates, further growth of internet sales and the growing number of retailers shedding stores through Company Voluntary Agreements (CVAs).
Colliers’ Co-Head of Retail Paul Souber, commented: “The retail, food and beverage industry is facing an unprecedented challenge at present unlike any other in living memory and whilst the government announced some initiatives in its Budget last Wednesday to try and help the UK economy, it hasn’t appreciated the scale of the issue and the measures don’t go far enough.
“The current value of retail sales is £394 billion and from this, the retail industry generates five per cent of total GDP. The sector contributes £7.5 billion in business rates and employs 2.9 million across the UK, so with an industry that offers so much to the country’s economy, swift and drastic action is required. The legislation which the Chancellor of the Exchequer, Rishi Sunak, introduced last week ignores the big players or those with a rateable value above £51,000, which are facing potential collapse.
“We understand the inordinate pressures that retailers are currently facing as long-term structural changes to the retail market play out. But retailers, landlords and investors face equal challenges, and the way forward has to be an equitable approach which respects the situations of both.”
The proposals call for a five-point plan, which would better balance the interests of retailers, landlords and investors. They call for:
- Business rates tax free holiday to be given to all retail businesses with immediate effect
- Retailers to be able to defer VAT so that cash flow can be conserved
- Business support loans need to delivered swiftly without undue bureaucracy
- The British Business Bank should be able to consider all businesses for emergency funding depending on their financial predicament
- Limited incentives/ rent free options for retailers
Souber observes: “This isn’t just blue sky thinking. This model is something that urgently needs to be taken into consideration to prevent the collapse of the retail sector altogether. Customers are the oxygen of a store and without them, retailers can’t survive.
“It is absolutely vital that the Chancellor’s package being announced this afternoon properly covers both retail and hospitality industries and in our view the measures that should be taken into consideration should be a swift implementation for all companies.”