Sainsbury’s has called on the new government to deliver on its promise to reform business rates, following research which shows that failure to act could lead to 17,300 retail closures over the next ten years.
The research, carried out by Development Economics, also raises concerns around the previous government’s decision to remove the freeze on the ‘multiplier’ – the rate in the pound at which business rates are charged.
In the first year alone the increase will cost businesses £1.6bn, over a quarter of this falling on the retail sector. Sainsbury’s said it wouldn’t just hurt businesses but retail industry employees too, with 4,300 retail jobs set to be lost in 2024/25.
However, the report suggests a 20% headline cut to retail business rates could create over 17,000 retail jobs – which might otherwise be under threat. It would also boost GVA by £400mn per year.
Simon Roberts, chief executive of Sainsbury’s, said: “All responsible retailers want to pay their fair share of tax, but the current business rates system has become an enormous burden on our industry. It is no longer fit for purpose. It has failed to keep pace with major changes in how customers are now shopping and how much our retail industry has changed over the last decade. As a result, it is directly causing store closures and job losses across the sector.
“We believe there is a better way – one that will contribute to higher economic growth and help our communities to thrive. Today’s report shows that reducing business rates would enable businesses to invest in more stores, creating jobs and generating prosperity. We welcome the new Government’s manifesto commitment to reform business rates and hope that it will move quickly to deliver on this promise, which would deliver real benefits for communities, employees and businesses alike.”
Sainsbury’s, and its sister retailer Argos, feature in an extended company profile in the brand new RetailX Europe Top1000 360° report. The profile looks at how Sainsbury’s is using technology to improve its customer experience.
The full report uses 11 company profiles to showcasing the retailers standing out in the market. Each profile offers company profit and sales figures, share price and web traffic as well as a review of what makes their business exemplary.
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