Business Rates to Blame for High Street Crisis

16th April 2018.

The leader of The Entertainer, Gary Grant, has demanded that the Government accepts blame for the high street’s current woes, in particular, the skyrocketing business rates.

In a recent interview with the Press Association, Gary Grant admitted that while there were other factors at play, the government’s recently implemented change in business rates was the “real killer” and had meant the high street had become “out of line with retail turnover”. The government has announced plans to raise business rates by £50,000, with West End restaurants also facing a similar increase.

With big names such as Toys r Us and BHS closing their doors, smaller businesses have an even slimmer chance. E-commerce shopping has become more popular with consumers, and due to these retailers’ online presence, they are also exempt from the business rates that plague brick and mortar stores.

Sustaining a competitive edge, therefore, is necessary for keeping pace with these online retailers. While some businesses are proud of their rudimental foundations, embracing ambitious marketing campaigns and a larger selection of services will keep them ahead of competitors.

Here at the Credit Protection Association, our debt recovery services will free up cash flow for our members, affording them the capacity to expand and grow their business. Our members have spent money on new offices, larger marketing teams and even new technology, all to fight these high street woes head-on.

Ten retailers have collapsed during 2018 alone, putting it on track to be the worst year for retail for more than a decade. The turmoil in Britain’s towns has resulted in the potential loss of around 12,000 jobs as brands including East and Prezzo close branches.

Debenhams is also expected to reveal plummeting trading figures later this week, while the sector is still recovering from the collapse of Toys R Us and Maplin on the same day, both of which also used CVAs before they went under.

Despite the recent spate of CVAs, essentially insolvency proceedings that allow a company to shrink its operation instead of officially entering administration and selling assets to survive, Grant warmed they should be used cautiously.

“At the end of the day if a business cannot afford the rent, and can work together to address their unprofitable sites, CVAs could be avoided,” he added.

“When CVAs work that is good for the rest of the employees that still have a job, but if they don’t work then everyone loses their job – and Toys R Us is a good example of how they don’t work.

“The sad thing is that if the underlying business isn’t strong, then closing a few stores isn’t the answer.”

The so-called ‘retail apocalypse’ has affected the capital the worst, with many stores and restaurants forced into insolvency due to the vast expense posed by giant business rates. There are ways to combat the negative effects, and whether a business is online or on the high street, focussing attention on cash flow can prolong life a little longer.

In this difficult political and economic climate, it is important to always consider the competition. Not just rival economies from the US and elsewhere in Europe, but also neighbours right here on the high street. If the business isn’t equipped with the latest technology, expertise or workforce, then it raises the risk of becoming eclipsed by the closest neighbour.

At the Credit Protection Association, our debt recovery services chase late payers and unpaid invoices and give our members some cash to play with. Rather than banks or other alternative finance platforms, we do not lend money, but instead merely return money that is owed. So for businesses struggling to survive the whopping rise in businesses rates, come to CPA for financial help and advice. Our services will not only provide some extra cash but also advise on how to improve credit ratings; establishing a solid foundation for the future.