Is online business proving to be the death of bricks and mortar retail?

The retail sector is one of the sectors that has been feeling the brunt of a struggling and inconsistent economy, and the increasing appeal of the online market.

This week, the Housing, Communities and Local Government Committee (HCLG) has revealed their recommendations to help improve and maintain town centres, Colliers International has reported.

Colliers International welcomes The HCLG Committee’s new recommendations.

“This is something we have been calling for—for years,” said John Webber, head of business rates at Colliers International.

The UK government is in the process of considering implementing a bevvy of taxations on online deliveries and packaging, and simultaneously reducing business rates for the high street retailers.

The idea behind this would be to more forcefully level the playing field to help the high street survive.

Webber added: “The Select Committee warns about high streets becoming like ghost towns if nothing is done. I hope they realise that many are already ghost towns now, and the golden goose of retail has already been fairly well cooked and indeed burnt around the edges.

“I also feel that comments about concessions to retailers with physical stores, but not looking at wider business rates reform, only addresses one half of the equation.”

The HCLG has cited the need for a “meaningful relief” from business rates; a more radical change of these “dates policies and an unfair tax regime” has to occur if there is to be any hope for the survival of bricks and mortar retail.

Colliers International stated: “With online companies now accounting for about a fifth of sales and the number of bricks and mortar retailers declining in town centres at a rapid rate, an online sales tax, and possibly an increase in VAT and ‘green taxes’ on delivery and packaging—these recommendations could help.”

“We need a total reform of the system, and to look at the cost to other businesses, including casual dining, pubs, office occupiers, as well as the car industry and the manufacturing sector,” Webber insisted.

“We also need to look at the system of reliefs—we have business rates deserts in some parts of the country, where some businesses pay absolutely nothing for the upkeep of local services. This is not equitable if the government needs to take the same tax take from the system (£27bn net).

“And the appeal system continues to be a mess, as I sure next week’s Check Challenge Appeal (CCA) figures will show.”

He concluded: “Only a total roots and branches reform will be enough to slow the tide. We support the recommendation to tax online retail to try and level the playing field—but the solution to the business rates problem needs to be much deeper.”