The original Grimsey Review, in 2013, warned of an impending crisis on for UK retail and, sure enough, this proved chillingly prescient. 2018 alone has seen several high-profile CVAs and significant job losses. There is a broad consensus that immediate and profound change is necessary.
As part of his updated review, Bill Grimsey outlines a series of recommendations to address the challenges facing the sector. In this blog, we look at a selection of its key talking points.
One of the key discussion points was the degree to which business rates hamper the performance of the retail sector. Given the scale of the problems facing UK retail, a more ‘retail-friendly’ approach to taxation is required. At a time when bricks and mortar retailers are struggling to compete with online retailers, business rates disproportionately affect occupants of higher value properties, leaving physical retail at a further disadvantage. With the recent national minimum wage increase and its impact on retailers’ cost base, perhaps a review of business rates is in order? Many respected industry voices, including former John Lewis boss and West Midlands Mayor Andy Street, feel that this would go a long way to relieving the cost pressures squeezing UK retailers.
Grimsey’s point that the UK needs a national platform to share data on high streets and town centres is a valid one. This is a national problem and unless we are unable to find coordinated solutions, then the situation will get even worse. We can already quantify the performance of our shopping centres and retail spaces, and draw insights that can used to drive better outcomes. We must share these insights to drive change and improvements, not just in concentrated geographical areas, but across the industry as a whole. How the industry organises to ensure this approach remains to be seen, but leadership and communication will prove vital.
Variety is the spice of life
Retail has undergone a profound transformation in recent years, underpinned by the rise of e-commerce, yet too many high streets remain static. To understand the extent of the issue, we need look no further than the tens of thousands of empty shops around the UK. Put simply, the UK high street in its current format is not working and, according to Grimsey, retail assets can no longer remain the sole centrepiece of high streets and town centres. Consumer tastes have changed and spaces which offer greater variety in asset classes represent a potentially lucrative opportunity for investors, who have a real chance to deliver more uses that appeal to the changing needs and wants of the public.
It will be interesting to note whether and how the findings of the second Grimsey review lead to tangible outcomes but one thing is for certain; now is a time for action.