If the high street is going to survive, local retailers have to do more to offer shoppers a bespoke shopping experience online competitors can't, MPs have said. The Government should also consider an online sales tax to help secure the future of town centres.
The Housing, Communities and Local Government Committee's (HCLG) report published earlier this week, said dated policies and an unfair business rates tax system were stacking the odds against bricks and mortar retailers. Amazon's bill amounted to around 0.7% of its UK turnover, while high street stores pay between 1.5% and 6.5%, according to the report.
Commenting on the report, Greater Manchester Area Lead, Phil Thompson, said: “The Government needs to go further and faster to level the playing field, and they have a range of measures at their disposal.
“But the local authorities must now also start to sow the seeds of change, and get to grips with the fact town centres have changed - they can’t keep doing the same things and expect change. While we are starting to see signs of that happening here in Greater Manchester in places like Stockport, we need more of that vision and enthusiasm for change everywhere, and not just in the main town centres, but in the smaller district centres too where there are exactly the same problems.
“All high street businesses are experiencing a turbulent time, with sky high business rates, increasing rents and rocketing employment costs. Alongside these challenges there’s also been a seismic shift in the retail sector, with the expansion of large online brands and competition from out-of-town retail space taking its toll.
“Small businesses are at the heart of our communities, providing jobs, bespoke products and a personal service. Yet, despite being key to the success of a town centre, confidence is rock bottom and many independent traders are finding it difficult to stay afloat. Who knows how Brexit – whatever flavour we get – will impact on those shops?
Thompson added: “This report rightly outlines the importance of Government, local authorities and businesses coming together to look at real solutions to these issues so that our high streets are able to thrive. The challenge now is how to work positively to enhance our high streets and town centres in this new landscape.
“Currently the tax system favours big online companies over independent businesses based on the high street, which are already facing a tough trading environment. The broken business rates system penalises firms, regardless of their profits or ability to pay.
“The new business rate discount coming into play in six weeks’ time, should give some relief for smaller firms. Long term, there needs to be a serious overhaul of the unfair tax that hits firms before they’ve had the chance to make their first pound of turnover, let alone profit.”