Tesco chief govt Dave Lewis highlights the burden of business rates on retailers
The boss of Britain's greatest grocery store has blamed the collapse of some retailers partly on the expense of business rates.
Dave Lewis, Tesco chief govt, stated the costs that companies should pay on their buildings performed a "large part" in sending some retailers to the wall.
Last yr a revamp of business rates noticed some payments rise, whereas others fell.
He questioned whether or not elevating business rates was leading to an "uneven playing field" for some companies.
Retail is the UK's greatest personal sector employer, Mr Lewis informed the BBC.
"Are we allowing it to stay competitive, or are we by stealth lowering corporation tax and increasing business rates to a place which is creating an uneven playing field and forcing people to think about how it is they avoid that cost and find other routes to the market?" he requested.
The Tesco boss stated business rates was the most important tax his firm paid, including as much as greater than £700m a yr.
"You need a level playing field ... between an online digital world and a traditional retail store base model like the one we have," Mr Lewis stated.
Business rates adjustments 'threaten excessive streets'
Mr Lewis additionally took ministers to job for ignoring retailin addition to the meals tradewithin the authorities's industrial technique.
His plea for motion on business rates echoes feedback made final yr by Mike Coupe, chief govt of rival grocery store Sainsbury's.
He referred to as for "fundamental reforms" to the "archaic" business rates system, which ignored the rise of on-line retailers primarily based in out-of-town warehouses.
Sainsbury's not too long ago introduced plans to merge with Asda in a deal that might create the UK's greatest grocery store operator, eclipsing Tesco.
Despite the hefty prices confronted by retailers with massive numbers of bodily shops, Mr Lewis says retailers are "definitely here to stay".
He conceded that Tesco has extra retail house than it wants, prompting it to attempt concepts like bringing in different manufacturers in comparable to Holland and Barratt to supply clients one thing completely different.
Too a lot house is only one downside supermarkets are grappling with: they're additionally threatened by on-line retailers comparable to Amazon.
It now owns the upmarket US grocery chain Whole Foods and earlier this yr opened a grocery store with no checkouts in Seattle as a testbed.
Doug Gurr, Amazon's UK boss, stated most retailers now have a mixture of on-line and bodily retailer gross sales.
"There's huge value in walking in and touching and feeling products … but at the same time there's a huge convenience in being able to order products on my phone, on my tablet, to be able to order 24 hours a day," he stated.
Retailers that need to give clients what they need may have a "blend of the two", he additionally stated.
Mr Gurr highlights an Amazon vendor who has run a file retailer in Stirling for greater than 25 years. Now greater than three quarters of his gross sales are on-line to clients world wide.
"It's going so well he's actually been able to open two more physical shops in Edinburgh and Aberdeen, so that for me is really where we're going," he stated. "I think you'll see a much more hybrid model."
Meanwhile, Marks & Spencer chairman Archie Norman has summed up the challenges to retail within the firm's annual report revealed on Thursday, saying the "tide is running more strongly against us now than at any previous time".
M&S plans to shut 100 UK shops by 2022 in a transfer it says is important for the retailer's future.
He added: "There is little doubt in my thoughts that we face formidable headwinds and transformational adjustments are wanted.
"The continued migration of clothes and residential on-line, the additional improvement of worldwide competitors, the expansion of dwelling supply in meals and the march of the discounters all quantity to threats which might be eroding our business and market place.
"These, together with a challenging UK consumer market, mean that we have a burning platform. Accelerated change is the only option."