The Retailer Summer 2018_FA_20.07

NEWS FROM THE BRC The Government needs to support retail through its transformation

the retail industry is engaged in a period of transformation reacting and adapting to

HELEN DICKINSON Chief Executive British Retail Consortium

Retail is a dynamic and diverse industry. As the UK’s largest private sector employer, it is a driving force in our economy. Retailers alone are responsible for £7 billion in business rates annually, a quarter of the overall total. Against the backdrop of insolvencies and CVA’s, the retail industry is engaged in a period of transformation reacting and adapting to changing customer behaviours. People want to interact with their favourite brands seamlessly, whether they’re in store, on their computer or on their phone. Even on their phone while they’re in store. So, what does this mean for the future of retail? There will be fewer shops and their role will be different, more engaging, more based on experience. Online will continue to grow driven by consumer demand but treating online and stores as two separate channels will become increasingly irrelevant. Customers don’t think of it like that, so, why should we? There will be fewer retail jobs but there will be the opportunity for more high tech jobs in the industry as shopping is changed by the internet of things and the power of data. We’re already seeing the global digital giants move into physical space with concepts like Alibaba’s Hema stores in China or Amazon Go in the US, proving that the physical store still has a future. There has been much debate about the future of the high street. The high street is not dead. There are those destination locations that will thrive and some that will find it much more difficult but their future will be less reliant on retailing as a mass local employer, and more reliant on services, leisure, experiences and care in the community as the population continues to age.

Policy makers can play their part in this transformation. We are calling for a two-year freeze on business rates increases to provide some relief for the retail industry at a time when it is under significant cost pressure and is going through a period of transformation driven by technology and changing consumer behaviour. This would take some of the cost pressure off retailers, while allowing time for a dialogue between government and industry to develop a proposal for a modern business taxation system, fit for commerce in the 21st century, which supports business growth and improves productivity. In the long-term, we need a fundamental reform of business rates, which in their current format serve to prevent the reinvention of places by discouraging new entrants to the market. We need a greater vision for what we want our high streets to look like with authorities better able to consent to the change of commercial use of buildings and former retail spaces. We are operating in one of the most challenging environments I have seen in my career but this is about transformation retail not Armageddon retail. Those that thrive through this period will have done so because they have grasped the opportunities available to them.

changing customer behaviours.

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