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The last few weeks of store closure announcements have given us the clearest possible evidence of the pressure customers, and in turn retailers, are under. It’s absolutely clear that consumers have a lot less money available to spend

The latest figures show real household disposable incomes dropping faster than at any time for 34 years.

And the list of businesses going into administration or shutting shops confirms it’s non-food retailing that’s being hit hardest. We’re always more likely to cut back on buying furniture or clothing than food. We all have to eat, so it’s non-food retailers who are seeing the biggest sales falls. While even what they do sell is not making them what it was because of the deals and offers it’s taking to generate those sales.

At the same time many of the same rising costs that are affecting customers – utility bills, commodity prices – are undermining retailers’ ability to make their sums add up.

If you’ve got customers spending less, and tightening margins on what you are managing to sell, the last thing you need is to be confronted with a bill for the next three months rent on your premises – it’s often cashflow rather than profitability that kills a business.

June’s quarterly rents day has been the final straw that probably explains the distressing concentration of retail failures over the last couple of weeks.

It won’t be the sole explanation. Plenty of retailers who pay rents quarterly upfront are doing OK but it won’t have helped those already close to the edge.

And the state of our retail sector really matters. To the three million people whose jobs depend on UK retailing, to their families, to suppliers and to the wider economy.

We need a thriving private sector, not least to offer real career opportunities to people whose jobs have been lost in the public sector.

I’m not saying the cuts aren’t necessary. This is no time for zig-zag Government. The deficit has to be dealt with to get the economy back on a firmer footing for the long term. Reducing public spending must be the mainstay of doing that.

And I’m not calling on the Government for handouts but there are things it should do to support retailers through these difficult times.

The Government’s Plan for Growth highlights retail as one of its priority sectors. There’s a clear acknowledgement that it is capable of growing and barriers that might slow or prevent that should be tackled. It’s a positive agenda but, we need it to be delivered.

Most retailers are big users of property. In April they faced an eye-watering 4.5 per cent increase in their business rates costs because it was based on last September’s Retail Price Index (RPI).

What we want is a system that’s more predictable and more affordable. Future Business Rates increases should be based on the Consumer Price Index (as used for pensions and much else besides) or an annual-average of the RPI to smooth over the spikes.

The Government’s Red Tape Challenge is welcome recognition of the harm excessive regulation does and needless rules should be removed. But it can’t be the only, or even the main, means to reducing the burdens that stop businesses growing. Let’s see a comprehensive moratorium on new regulation for the life of this Parliament, and not just for small companies.

We’ve seen the Government take on TV celebrity Mary Portas to review the fate and future of our troubled high streets.

I’m glad the Government recognises they are important and we’ll judge this exercise on what it finally recommends but, listening to some people, you’d get the impression that this is the first time anyone’s noticed many of our town centres are suffering and that no-one had ever previously given any thought to the issues or solutions.

In fact the BRC’s rescue plan 21st Century High Streets is something we’ve been campaigning on for two years now. It spells out a range of recommendations in areas including costs, access and investment.

Right now, what we need much more than another report is action to help retail back on its feet and get it doing what we all need it to. Creating jobs, driving recovery. Serving customers and country.

Written by Stephen Robertson
Tuesday, 05 July 2011 10:10

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