Retail is at death’s door — and tinkering with business rates won’t save it
The way that purchasers saving Debenhams and Arcadia don’t need their 500 shops shows how profound the high road emergency is.
The coronavirus pandemic has meant a brutal period for high street retailers, many of which were struggling before last spring as more and more consumer sales moved online.
This trend was particularly noticeable last week with the rescue deals brokered for the stable of brands owned by Arcadia, Sir Philip Green’s bust fashion group, and for ailing department store chain Debenhams. In both cases, there were zero appetites from the buyers to take on any of the groups’ combined estate of more than 500 shops.
Instead, these major high street presences look destined to become just websites, shorn of their stores and their large workforces. It is a stark illustration of the industry’s tilt towards the web, accelerated by the pandemic, and of a bleak future for jobs in what is still the UK’s biggest private employment sector.
Around 25,000 people are likely to lose their jobs as a result of the failure of Arcadia and Debenhams, and while online groups are expanding — Boohoo is opening a warehouse in Wellingborough with 1,000 jobs — the online model requires far fewer employees than do sprawling department stores.
There will be the physical scars too: between them, according to adviser Altus Group, Debenhams and Arcadia occupied 1.4m square feet of retail space — the equivalent of 194 Premier League football pitches.
That implies significantly additional vast openings in high roads and malls that landowners will battle to fill, not least given the effect of the pandemic on the bars and cafés that had recently been anxious to consume the spaces emptied by withdrawing retailers.
Nobody is imagining that Debenhams and Arcadia, with their tails of likewise ran style brands, are the best the UK high road has to bring to the table. Both experienced an absence of speculation and of the executive's vision. There are all things considered, evident instances of solid high road store-based players –, for example, nitty-gritty chain Primark, where customers line up to get their hands on low-value dress and homewares.
Indeed, even before anybody had even known about Covid-19, an excruciating rebuilding of the retail business was in advancement as home shopping filled in height and messed up rents and business rates steered the results against large store bequests.
The pandemic has quickened this Darwinian cycle and the aftermath in occupation misfortunes and void stores will be startling temporarily, regardless of whether restoration is conceivable sometime later. In the course of recent years, as indicated by the British Retail Consortium, one in every 50 shops has for all time shut, and without intercession at this frantic hour, it contends, this number will “just go up”.
There are enormous issues that should be settled if high roads are to recuperate from these most noticeably terrible of times. The emergency has achieved a truly necessary reset of rents, yet what of business rates, right now on hold as a component of the public authority’s crisis business uphold measures? On the off chance that the proprietors of Arcadia and Debenhams’ stores can’t discover new inhabitants, they will be on the snare for a £141m bill. Can’t the public authority think about an approach to better burden blasting web organizations?
In the event that pointless shop terminations and occupation misfortunes are to be maintained a strategic distance from, business rates help will, at any rate, must be reached out past April (as has just occurred in Scotland). Let’s be honest, superfluous shops have been shut since Christmas and may not be open when their bills for 2021 land.
Rates have been looked into to death by the public authority: retailers are as yet in tension with regards to the result of its current “key audit”. Yet, presently it has run out of the street. Actual retail is biting the dust and without activity currently more store-based retailers will vanish, making any recuperation harder to accomplish.
Spread the word: even macho bankers have mental health issues
There is a propensity to limit nearly anything a financier may say about their work environment and how distressing it very well maybe. The high as can be pay, the enormous house, the special seasons in Dubai, and the individual colleagues all militate against any type of compassion.
This response ought to be saved. The pandemic has harmed the psychological wellness of millions, be it from the demise of a family member, the repetitiveness and limitations of a lockdown, or the extended periods many have needed to place in, regularly to save their organizations from going under.
Tom Blomfield, the originator and previous CEO of online bank Monzo, said this end of the week that he was struck somewhere around tension as speculators pulled backing and clients quit spending in the early long stretches of the principal lockdown.
Blomfield was already stressed when the pandemic hit, but the pressure he faced in the weeks after the first lockdown was so intense he had to take a step back. First, he surrendered his chief executive role to become president, then he quit the company altogether. He joins a list already including Jayne-Anne Gadhia, the former Virgin bank boss, and António Horta-Osório, chief executive of Lloyds, who have also publicly told of their battles with stress and anxiety.
Three lockdowns have had a major impact on the mental health of many in the UK. Among a welter of figures showing rising anxiety levels, Glasgow University research found that during the first lockdown, one in four respondents reported at least moderate symptoms of depression.
Banking is a macho industry that finally looks as though it is addressing the need for cultural reform. The hope must be that hearing about the difficulties of top bosses will encourage other directors to review how they manage their own wellbeing — and that of their staff.
How long will Kwarteng’s stand on workers’ rights last
There should be praise for a Conservative minister who openly rejects his youthful dalliance with crude free-market policies. Is Kwasi Kwarteng deserving of such praise? Having contributed to a 2012 collection of essays that called for a bonfire of regulations and branded British workers “idlers”, he appears to have broken with his past.
After his recent promotion to the cabinet, Kwarteng found himself in charge of a controversial plan to downgrade EU employment protections, a plan apparently inherited from his predecessor as business secretary, Alok Sharma. The plan is understood to have included proposals to end the 48-hour maximum working week and remove overtime earnings from calculations for certain holiday pay entitlements.
The response from Labour and the unions to any prospect of weaker protections for workers was immediate. They said it was an outrageous move in the middle of a pandemic when so many were either on furlough and in fear for their jobs or being overworked by employers looking to survive the pandemic.
Last week, the secretary of state for business, energy and industrial strategy announced that the plan had been axed, saying: “I made it very, very clear to officials in the department that we’re not interested in watering down workers’ rights.”
It is a U-turn that this newspaper had foreseen.
Those in the cabinet who argued for the axing of the plan will have focused on the likely reaction from Tory MPs freshly elected to so-called red wall seats. The many Brexit voters in these constituencies didn’t vote to leave the EU only for the government to hand their employers a bigger whip to beat them with.
There is a worry, though. Kwarteng is still aligned with a sizable group of free-marketeers in the cabinet. And when the pandemic crisis has eased, they will without a doubt once again press their case for deregulation. When it comes to preserving workers’ rights, this is a skirmish in a longer war.