M&S BOSS MAKES PLEA TO SAVE THE HIGH STREET

The chief executive of M&S has called for a radical reform of the business rates system in the UK to prevent the total collapse of high streets.

In a hard-hitting intervention, Stuart Machin has described the current system as “daylight robbery” and blamed it for cities and towns becoming “increasingly full of vacancies and dodgy shops”.

The retailer is currently accelerating the closure of 68 UK stores as it prepares to withstand “stormy weather” with a “simpler leaner business”, with fears that Scottish stores such as Aberdeen may be affected.

The firm said its estate of 248 large stores contained a “tail of low productivity” shops where profits on clothing and home goods were lower, as well as not reaching expected profitability levels on online sales.

It aims to replace some of these with a “more focused” group of full line stores that are “fit for omnichannel retailing”, offering more space for food retail that includes click and collect capacity and, crucially, are “lower cost to operate”.

Mr Machin said the retail giant was “investing heavily in stores and high streets” – and that now government must end the business rates “daylight robbery”.

He said: “I’m committed to having great shops and while others go online – or go bust – we are investing heavily in stores as core to our ‘omnichannel’ offer (stores and online working together) so customers can genuinely shop how they like, when they like.

But our stores can’t sit in aspic. They can’t be museums to bygone days of retail. They must change – as what our customers want has changed.”

He added that rising costs were jeopardising the future of high street retail, and that: “Running a shop costs a lot more than running an online business, and a large part of that is down to business rates which have zero link to profits or, indeed, reality. It’s why the total tax rate for retailers is around 70% and why it pays 25% of all business rates despite being 5% of the economy. 

And it’s why high streets and city centres are increasingly full of vacancies and dodgy shops; rates have gone up by the same amount as retail property values have gone down. Frankly it’s daylight robbery.

As retailers our job is to innovate and take the tough decisions to keep our businesses going and – if we can – growing in really tough times. So we can keep employing millions of hardworking people, support UK farming which is on life support, invest in our stores so they carry on acting as anchors across the country, and support the public purse.”

He concluded: “We don’t want handouts – we just want fairness.”

In Aberdeen, M&S currently operates two large stores including a full-line store on St Nicholas Street and a food and homeware shop in Union Square shopping centre. Inverness has a full-line branch in Eastgate shopping centre.