Now that it’s official that we are in a recession, I get asked a lot by journalists, ministers, civil servants, MPs and suppliers how it is affecting our sector.
The feedback I get is that the local shop is more important to customers during times of economic downturn. The biggest worry for convenience retailers is the ability to get credit, which, of course, affects cash flow and longer-term investment.
With this in mind the recent government announcement of a range of measures designed to address the cash flow, credit and investment needs of small- and medium- sized businesses was welcomed.
This is an area where the government has got it broadly right, but one area where it is definitely getting it wrong is with the planned triple whammy of rate increases that retailers face over the next two years.
As it stands, retailers are looking at a 5% increase on business rates in April 2009, and a 2010 rate revaluation which was calculated at the peak of the rental market and is likely to see retail rent increases of up to 15.9%.
The Business Rates Supplements Bill may add an additional 5%, threatening to make a bad situation worse.
Halting these increases is the single biggest help that government could give the retail sector. We need a freeze on business rates to reflect the economy; the 2010 rate revaluation to be delayed until the economy regains stability; and the implementation of the Business Rate Supplements Bill to be delayed until economic conditions improve. While I am confident that the message is hitting home, we now have to see real action from government.
The feedback I get is that the local shop is more important to customers during times of economic downturn. The biggest worry for convenience retailers is the ability to get credit, which, of course, affects cash flow and longer-term investment.
With this in mind the recent government announcement of a range of measures designed to address the cash flow, credit and investment needs of small- and medium- sized businesses was welcomed.
This is an area where the government has got it broadly right, but one area where it is definitely getting it wrong is with the planned triple whammy of rate increases that retailers face over the next two years.
As it stands, retailers are looking at a 5% increase on business rates in April 2009, and a 2010 rate revaluation which was calculated at the peak of the rental market and is likely to see retail rent increases of up to 15.9%.
The Business Rates Supplements Bill may add an additional 5%, threatening to make a bad situation worse.
Halting these increases is the single biggest help that government could give the retail sector. We need a freeze on business rates to reflect the economy; the 2010 rate revaluation to be delayed until the economy regains stability; and the implementation of the Business Rate Supplements Bill to be delayed until economic conditions improve. While I am confident that the message is hitting home, we now have to see real action from government.
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