Fraser Group, led by billionaire retail mogul Mike Ashley, has expressed disappointment in the UK government’s Budget announcement, arguing that it fails to provide meaningful relief for struggling retailers in terms of business rates. The company believes that structural reform is necessary to address this issue, citing repeated requests from the retail industry as a whole. Frasers Group had anticipated more substantial relief measures until such reform is implemented.
One specific aspect of the Budget that Frasers Group finds inadequate is the £2 million rates cap for businesses, which will be in effect from July 2021 until March 2022. The company claims that this limited relief package is essentially useless for larger retailers. This decision has significant and far-reaching consequences for Frasers Group. It claims that without suitable relief, acquiring former Debenhams sites will be nearly impossible, leading to a loss of job opportunities. Additionally, the company will need to reevaluate its store locations to identify those that have become unviable due to unrealistic business rates.
This outcome is also concerning for the broader retail industry, as there were rumors that Frasers Group might consider taking over some of the soon-to-close Debenhams sites. Most plans for these spaces have focused on converting them into residential units, so Frasers Group’s disinterest raises concerns about potential store closures if existing locations fail to generate sufficient revenue.
Frasers Group argues that retailers should pay fair rates based on realistic values. The company believes that the current business rates system is unwieldy, overly complex, and outdated. Retailers have long complained about the burden imposed by these rates, which often exceed those faced by other types of businesses.
Given Frasers Group’s influential position in the retail sector and its extensive store portfolio, the company’s criticism of the government’s business rates relief measures should be taken seriously. It underscores the urgent need for substantial structural reforms to support struggling retailers and ensure a fair and sustainable business environment. Until these changes are implemented, the future remains uncertain for Frasers Group and the broader retail industry.
Useful links:
1. Introduction to Business Rates
2. Proptech Solutions for Business Rates
