Around 12,000 jobs have been lost or put in danger over the past year as insolvencies hit the highest level since the financial crisis.
According to their report, in the 12 months since April 2017’s business rates revaluation, 15 major retailers or restaurant groups have launched a CVA or entered formal administration, 10 of which have been since the start of the year.
In 2008, the height of the last financial crash, 12 companies went under throughout the entire year.
Colliers has calculated that these failed companies faced a combined business rates bill of £152 million last year and would be hit by even higher figures this year.
Closed/Looking to Close
Bill (m) 2017/8
|2017||Feather & Black||20||£0.55||£0.58|
|2017||Handmade Burger Co||9||£1.3||£1.4|
|2018||Toys R Us||105||£21.9||£21.9|
|2018||Bargain Booze + Wine Rack||+||£3.26||£3.42|
|TOTAL TO DATE||£152 m||£154m|
“We wonder how many more retailers are going to get into trouble or people lose their jobs before someone decides to tackle the problem properly,” Colliers’ head of business rates John Webber said.
Webber added that business rates were just the tip of the iceberg of the issues facing retail, citing higher wages, the apprenticeship levy and lower consumer spending. However, the looming further three per cent rise later this month will and rising inflation will knock retail “for six”.
“The fact that ten sizeable retailers or restaurant groups have gone into administration or CVA since the beginning of the year is extremely worrying,” he continued.
He explained: “Some businesses, particularly those in London, saw massive rises in their rates liabilities in 2017, some of which they needed to pay last year, but with the second big uplift coming now in April, in addition to a 3% inflation rise, they are being knocked for six.
“Similarly, retailers and restaurant operators in less affluent areas who should have seen relief from the revaluation are still not benefiting, due to the fact that it takes four years of ‘transition’ before they are allowed to pay their bills at the new revalued level.
“By delaying business rates reaching their true levels, retailers and restaurant operators and pubs in such areas have been forced to pay for the better ones for too long and there is only so long that they can pay at inflated levels.”
Webber has joined voices including UKHospitality and called for a full review of business rates and their impact.