Next CEO Simon Wolfson calls for business rates to be slashed

Next CEO Lord Simon Wolfson has said business rates for high street retailers should be slashed by 35 percent and warned a vast number of stores could be forced to close if the government doesn’t take action.

Speaking to the BBC, Wolfson said the current system was “unfair” to bricks and mortar retailers, whose property values have fallen dramatically during the pandemic though the “business rates bill hasn’t reflected that”.

“In-store sales at Next have gone down 25 percent since 2015 but our rates on those properties have gone up 9 percent. They have become unfair because they no longer reflect the value property against which they’re charged,” he said.

Wolfson suggested that the price of a retail business rates cut could be offset by increasing rates on warehouses and online fulfilment centres.

“Rents on shops have been coming down, rents on warehouses have been going up and the rates don’t fairly reflect the value of warehouse property either. So I think the government can fund some of this by increasing rates on warehousing by around 50 percent,” he said.

He also said he doesn’t think there should be an online sales tax as “the consumer will pay the price of that”.

Business rates holiday

The UK government announced a business rates holiday last year to help companies during the pandemic. Retailers have called for an extension to the current holiday, which is set to end next month.

The treasury has said it is conducting a “fundamental review” of business rates.

“I think we’re at quite a pivotal place on the High Street history…we’ve had a dramatic drop in the value of retail properties because sales have dropped so far and many retailers are on the edge of administration,” Wolfson said.

“For those companies particularly if they go into liquidation, whether or not their new owners decide to take them on and keep those shops on, or close them, will depend on both the rents and the rates that are being charged.

“So over the next year or two, having the rates set at a level that is economic and fair is going to make an enormous difference to how many shops stay open in the short term. And it would be a shame for a huge number of shops to shut unnecessarily because rates are too high.”

Picture: Next media gallery