How 250,000 jobs could go as business rates and online giants kill shops
The Government has been urged to take action to prevent a high street 'massacre' as up to 20,000 stores are predicted to close this year
HIGH streets face the loss of 250,000 jobs in the next year alone unless the Government acts NOW to halt the death of traditional town centres.
Ministers have been told emergency action is needed in order to save stores as they battle against sky-high business rates and the massive growth of online giants.
The demand comes after controversial Sports Direct boss Mike Ashley snapped up department store House of Fraser for a cut-price £90million hours after the chain entered administration on Friday.
Joshua Bamfield, director of the Centre for Retail Research, last night issued a stark warning of a high street “massacre”.
He said: “The number of job losses could be between 200,000 and 250,000 for this year and 2019 and as many as 20,000 stores could close over the same period.
“In the past, the traditional high street has been protected from changes in the economy as people had to shop there.
“But now the decisive move to online and the heavy costs of running a shop, such as business rates, the living wage and weak economy have destroyed consumer confidence.”
A spokesman for Labour said we were on the brink of “a ghost-town Britain”.
So far this year around 30,000 retail jobs have been lost as the high street has been hit by a wave of store closures.
Household names Toys R Us, Maplin, Poundworld, Warren Evans and Mothercare have either shut down or announced plans for massive cuts.
As well as stores, a string of restaurant chains including Jamie’s Italian, Byron, Prezzo and Carluccio’s have all slashed their number of branches.
Federation of Small Businesses policy chairman Martin McTague last night demanded an overhaul of business rates.
He said: “For too long the system has been confusing, outdated and unfair to small businesses. This needs to be reformed.
“On top of this, around 3,000 bank branch closures across the UK, which are crucial to increasing both cash flow and footfall, have added to the woes of small businesses.
“The continued threat to ATMs also poses a danger to all firms in our centres.”
Chancellor Philip Hammond said this week he would consider “temporary tax measures” such as an “Amazon tax” to level the playing field between online and high street sales.
House of Fraser’s business rates bill topped £30million last year across 59 stores on sales of £787million.
In contrast, Amazon had £9billion sales but only paid £33million in business rates as it operates from vast warehouses on the edge of towns or close to motorways.
Conservative MP David Morris last night urged Mr Hammond to take action in the budget this autumn.
He said: “We need to offer help to struggling retailers, as the high street is in real danger of being wiped off the map.
“My personal view is that the burden needs to be placed on shopping districts that have the most footfall.
"There should be a ranking system where shops in busy London areas pay more relatively than in the Midlands or the North West.
“Each town and city could also be divided into zones so again retailers, shops and restaurants pay on areas that are busiest and more lucrative.”
Fellow Tory MP Kevin Hollinrake said it was time to review parking charges.
He said: “Shoppers are hit with a charge which doesn’t affect out-of-town retailer centres or online sites.”
Labour hit out at the Government last night, claiming the high street was being left with “gaping holes”.
A spokesman said: “Each time the shutters fall, it’s the next step towards a ghost-town Britain, where our towns and shopping centres become empty, sad spaces.”
He also vowed Labour would address the “broken” business rates system.
The spokesman added: “The Tories must now urgently publish a retail sector strategy to save Britain’s high streets and prevent even more jobs being lost before it’s too late.”
The high street “death toll” has been shocking in recent years, with more than 60,000 shops closing in the five years up until 2017.
Last year’s loss of 30,000 high street stores was a rise of four per cent on the previous 12 months, according to analysis by consultancy firm Begbies Traynor.
The company’s Julie Palmer said the “torrid time” was down to a mix of online competition, increasing staff costs and rising rates.
But she added: “Retailers who are most exposed to increases in business rates, and those that have failed to invest in technology and growing their customer base through marketing, are only going to lag further behind the pack.”
This year alone has also seen the disappearance of huge names from British towns — along with thousands of jobs.
Toys R Us and Maplin both closed with the combined loss of more than 5,000 jobs.
Poundworld went into administration in July but a rescue plan is now on the table to keep around 50 branches open.
Jamie Oliver’s restaurant chain Jamie’s Italian was forced to make a dozen closures and posh burger outlet Byron shut 20 stores back in January.
Big supermarket Morrisons made 1,500 senior jobs redundant in February, following department store Debenhams losing 320 jobs the same month.
Fashion chain New Look announced 60 store closures in March, with the loss of nearly 1,000 jobs.
Homebase plans to close around 60 stores, putting 1,000 jobs at risk. Marks & Spencer also announced it plans to close 100 stores by 2022 — moving a third of its sales online.
It comes as research shows the average business rates bill for a department store has been hiked by more than a quarter since last year.
The average bill was up 26.6 per cent to £717,952, according to a study by management consultants the Altus Group.
Meanwhile, nearly a fifth of retailers are preparing to shed workers, according to a report last month by the British Retail Consortium.
The average number of hours being worked by employees has also fallen by 2.8 per cent. The situation is so dire that unions are warning that planning should take place for mass retail unemployment.
MOST READ IN POLITICS
The general secretary of shopworkers’ union USDAW, Paddy Lillis, said: “If workers are to lose their jobs we have to ensure they are skilled up for the future.”
Last night a Government spokesman said: “Consumer habits and new technologies are changing how we shop and use our high streets.
“We are committed to ensuring high streets remain at the forefront of communities by helping them adapt and by introducing over £10billion worth of business rate support by 2023.”
'Our mall was so vibrant'
SOARING costs and an exodus of top-name stores have left a beloved local shopping centre a “sterile” shell where nearly one fifth of units are empty, remaining traders say.
Freshney Place mall in Grimsby, Lincs, has seen household names Mothercare, BHS, WH Smith, Comet, Phones4U, MFI, Woolworths, JJB Sports, Blockbuster, Thomas Cook, Game and Staples depart in the past decade.
And the future of its House of Fraser is still unclear despite the chain’s takeover by Sports Direct tycoon Mike Ashley. Prior to Friday’s rescue deal it had been earmarked for closure.
Florist Monica Brasted last week became the latest trader to quit the shopping centre, after 30 years at the location.
She said: “When I started, the costs were £15,000 a year for everything. But by 2008 the rent alone was £28,000, the service charge was another £4,000 and the business rates were £12,000.
“That was too much. Then the centre manager at the time gave me a flower barrow, which was more within my budget. For about seven years it broke even and kept three people employed.
“But the past three years we have had new management and Freshney Place is dying before our eyes. They have lost the plot and turned it into a sterile unit.
“Years ago the centre would make Christmas magical. There would be a massive tree, a grotto, carol singers, stages, the cast of Emmerdale to turn on the lights. Nowadays it’s a bit of paper and string.”
The centre is owned by London-based asset management company BMO Real Estate Partners, which declined to comment.
Thornton’s worker Gillian Warner, 55, said: “Since they took the bus station out of the centre my mother has stopped coming in. I wonder how many others are like her.”
According to data company Experian, Freshney Place has 21 empty units out of 109.
Other traders claim the number of shoppers has plunged by a third in five years.
Alex Scales, 55, who opened boutique Isla Grace just over a year ago, said: “I’ve heard the rents here are supposed to be really high. We are just trying to scratch a living. It is difficult. The high street is in massive decline.”
Another centre worker, Dawn McCreedie, 58, added: “I don’t think you should blame the internet entirely. Everything costs too much.
“I get £7.83 an hour now, which is less in real terms than I got 30 years ago and I have to pay £70 a week in fuel costs just to get here. No wonder nobody comes to the shops any more.
“When will the Government cut fuel tax? Their big-boy friends dodge tax all the time. Greed is out of control and we’re all paying the price.”
GOT a story? RING The Sun on 0207 782 4104 or WHATSAPP on 07423720250 or EMAIL [email protected]