Posted: Sat 15th Sep 2018
I am writing to you today, to warn you that the UK high street as we know it is on the brink of no return and will face obliteration unless swift action is taken.
I am the third generation of my families hardware business, and have witnessed first hand the massive changes to our high street, in particular over the last five years. The plight for the high street, is not just from independent businesses like my own, but it is also with the big retail stores. Once arch enemy's, but now we are united with the same big issues.
There has been a massive shift in the last few years to on-line shopping, and away from traditional bricks and mortar stores. Some will see this as progress, and inevitably all but a very few shops will remain, but I don`t agree. I feel that there is a future for shops, as there is a desire to see what you are buying, and shops are at the heart of our town centres and local communities, particularly in small market towns like where we trade. Traditionally when shops closed, there was another retailer waiting in the wings to replace them, but this is becoming less and less common, and more and more towns are littered with empty shops, on their high streets.
However in the future all shops large and small will have to operate with reduced turnover and ultimately less profit to what they would of once had, as trade is now shared between traditional businesses and the internet traders.
But for traditional shops to survive, we need to cut our crippling overheads, in particular business rates. Today's current setup is geared for big businesses in particular to fail. I was told the Exeter branch of Toy's R Us their combined rent and rates, were 1.1million per year just for this one branch. With overheads like this, and higher staff head count, of course they will be more expensive than the on-line retailers, as they will need to pass this expense on to their customers. Then of course, people see them as expensive, so more people will shop online, and it turns into a viscous cycle, with only one outcome which led to 3000 more people joining the unemployment queue. Can I also add while I am on the subject of employment, that retailers in most cases offer good employment, by having fixed hour contracts, pay above the living wage, amongst other benefits. Most internet pickers, and delivery drivers are on zero hour contracts or are so called self employed on the 'gig' economy, so many of them are earning less than the living wage. There is also less employment per £1 spent, with internet companies to tridtional bricks and mortar retailers.
So what is the solution? The treasury can not afford to cut business rates, but if nothing is done soon tens of thousands of people in the retail sector will lose their jobs, and this will cost the treasury two fold, with extra job seekers allowance payments, and less money paid into the economy from both the employees, and the retailers themselves. So what I would propose you do would be to introduce a parcel tax rangingfrom 20p to £1, for every parcel delivered in the UK. Although no new tax is welcome, I think people would accept that the balance is shifting from the high street to on-line, and as a result online retailers will need to start paying their fair share. With the likes of tax dodging Amazon, I think the public would expect them in particular to absorb this new tax rather than passing it on. By doing this, it would help level the playing field, by a small amount , and of course what money the treasury brings in from this new tax, they can offset by reducing business rates by the same amount.
I do hope you read my letter, and take on board my points, as I genuinely fear on what the future holds for the high street, and everyone who is employed on it. I would also hate the history books to show that the death of the British High street happened under a Conservative government.