Toy retailer boss blames rates for high street struggle

The boss of toy retailer The Entertainer has condemned Britain's soaring business rates, saying the UK government must take some responsibility for casualties on the high street.

Shopper footfall for UK has the sharpest drop in almost eight years. Picture: John Devlin
Shopper footfall for UK has the sharpest drop in almost eight years. Picture: John Devlin

Founder Gary Grant said that last year’s rate hike had been a “real killer” for retailers by heaping financial pressure on firms already suffering from squeezed margins.

His criticism comes amid a spate of restructuring and refinancing deals involving British retailers that have sparked store closures and more than a thousand job losses north of the Border.

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Figures released today have revealed that shopper footfall fell by 6 per cent last month –the steepest year-on-year drop since the end of 2010.

The sharp decline for the five weeks to 31 March reported by the BRC-Springboard Footfall and Vacancies Monitor compared with an average 1.4 per cent drop over the past year.

There was no growth in footfall for any UK region.

Growth has plummeted in all shopping destinations. The high street has suffered a decline of 8.6 per cent, shopping centres are down 4.8 per cent and retail parks have dipped 1.8 per cent.

More than 21,000 UK jobs have been axed in the first three months of this year.

Carillion’s collapse resulted in a bleak first quarter of 2018, with Toys R Us and Maplin both filing for administration in February and fashion retailers such as New Look and Select embarking on radical store closure programmes. While pressures from rising inflation and the National Living Wage have hit retailers, Mr Grant said business rates remain “the elephant in the room”.

He said: “Landlords are being very realistic about their rent, but the one thing that is not negotiable are business rates.

“(The retail sector) is seeing many stores empty for long periods of time and the biggest issue is that (retailers) can’t open stores.

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“Business rates are out of line now with retail turnover. Business rates are the real killer. Any increase in cost where you have flat and declining turnover is going to put pressure on the bottom line.

“The government just haven’t got it. They need to take some responsibility for the high street’s decline.”

The Entertainer has seven stores situated in Scotland.

Retailers, hospitals, pubs and schools were among those dealt a hammer blow in April last year when the first business rates revaluation for seven years left many facing crippling bill hikes.

Such has been the challenge for other retailers that company voluntary arrangements have become the go-to lifeline.

New Look has shut 60 stores through a CVA, while Carpetright is pursuing a similar strategy that could mean it closing another 81 stores.