Some of Britain's largest retail stores could face closure if the Government presses ahead with its proposed higher business rates tax band, according to new analysis by the British Retail Consortium (BRC).
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The findings reveal that of the 4,000 large-format shops with a rateable value over £500,000, 400 are at risk of shutting their doors. The sector has already seen 1,000 such closures in the past five years, with businesses squeezed by soaring employment costs, high taxes, and rising rates bills.
Retail contributes 5% of the UK economy but shoulders over 20% of all business rates. Large stores, which account for around a third of the sector's business rates bill, are especially vulnerable. With profit margins averaging just 2–4% for food retailers, the BRC warns that higher rates could force stores to increase prices, cut jobs, or close entirely.
These large stores play a crucial role in sustaining local economies. They employ one in three of retail's three million workers and, as anchor tenants, drive footfall to surrounding cafés, pubs, and independent shops. The BRC estimates that if all 400 at-risk stores were to close, up to 100,000 jobs could be lost and councils' annual revenues from retail business rates could fall by more than £100 million.
The Government has acknowledged the challenges facing high streets, announcing a new permanent reduction in business rates for retail, hospitality, and leisure premises. However, this relief is set to be funded by imposing the new higher tax band on large properties.
Helen Dickinson, Chief Executive of the British Retail Consortium, cautioned:
"Britain's largest shops are magnets, pulling people into high streets, shopping centres and retail parks, supporting thousands of surrounding cafes, restaurants and smaller and independent shops. After years of rising costs, far too many stores have disappeared – leaving behind empty shells that once thrived at the heart of our communities. Four hundred more large stores could disappear if the Government forces them into its new higher tax band. This would mean up to 100,000 jobs lost, emptier high streets, and less revenue for the Exchequer.
"The Chancellor can back families, jobs and high streets this Autumn, by excluding large shops from the new higher business rates tax band. This would not cost the Exchequer a penny, yet would help secure the future of 400 retail stores, and the communities they support, right across the country. But failure to act risks shuttering hundreds more stores, costing jobs, communities and the economy far more in the long run."
The BRC has urged the Chancellor to adjust the Autumn Budget, suggesting that the burden be shifted away from large retailers and instead spread across office blocks and other big commercial properties, where business rates form a smaller share of costs.
More information:
British Retail Consortium (BRC)
[email protected]
www.brc.org.uk
