It has been reported that Phillip Hammond has suggested having a tax to ‘’save the high street’’ imposed on Amazon. This would be in recognition for the extra charges the high streets face for being in bricks and mortar retail. It is fascinating that instead of trying to save our high street proactively, a tax related concept has been considered as a solution.
This archaic idea is quite a concern on many levels. Has the government not seen the high street deteriorate over a whole decade? Seriously, where were you? Back when the government was busy expensing to the hilt, bricks and mortar retailing was gravely declining.
If you want to make the competition fairer then why not look at why people aren’t going to the high street anymore? Wild statement, but it’s cheaper online. The government made many, many British households a lot poorer and therefore these households are forced to look for cheaper options to suit their income. But regardless of income bracket, everyone loves a bargain and online there are deals to be had. Parking charges are now at a ridiculous level in towns and cities and so why would people spend a considerable amount to park and visit the declining shops which offer zero variation?
Every single shopping centre is the same, has anyone really missed this? Shoppers are bored of the same stores being in every single town. We see the large players in retail gain more and more properties. Square footage is king, but it’s always more than just a numbers game. Instead of large retailers investing resource into gaining and acquiring more and more stores why not make visiting their store an experience? People like leisure activities and so making an immersive in-store experience, offering events that online can’t provide and engaging your face to face audience would be a good start in the hope of ultimately encouraging shoppers back through the door. Harrods is added to vast amounts of travellers lists as a tourist destination every year, as is Macy’s. We can’t all be those retailers at that scale, but we can take the granular level component of making a visit to retail stores an ‘experience’. There are those retailers who are doing well without the tactic of just buying more properties for their portfolio. Key to this point is those business that have made the move offline to expensive bricks and mortar properties, proving people still like to visit a store. Insider trends sums it up:
The government has successfully forced out the independent retailers. The rent and business charges for bricks and mortar are now out of most independent traders’ league. They are out of most retailer’s financial scope and to prove this we only need to remember the many bricks and mortar stores we have seen disappear, these rates are challenging for everyone. Business rates need to be looked at, period.
The chancellor wisely stated the we have the highest percentage of online shoppers in the UK, therefore these shoppers are the perfect target to penalise. He has also stated ‘’we must support the high street through the process of change’’ but this statement would have surely been more suited to 1995 when online shopping started, and not trying to shut the gate once the horse has bolted.
The chancellor also warned the ‘’high street is likely to irrevocably change towards more leisure rather than retail based’’. That already happened didn’t it? Its been over 20 years in the making.
As painful and obvious as the above is, and it would be ideal to see a ‘’fairer playing field’’, taxing Amazon is not the solution to this problem. If Amazon have under paid in proportion to what they have made in profits this needs to be addressed. Are Amazon the only ones who aren’t paying tax proportionate with profits? No. In fact there are several high street coffee chains who have avoided it too. Saying taxing Amazon will save the high street is ludicrous at best. Fairness within the taxing structure would be utopian. Taking more means people have less. A tax for Amazon does not help independent retailers or footfall come back to the high street, nor does it lower business rates, or parking charges, and it doesn’t help those struggling families the government created with being able to cope with their finances. This is apparent surely?
Before the favoured tax gun is taken out, loaded and pulled, remember LOTS of independent online retailers are on Amazon who provide a valuable channel for selling their goods. Amazon allows these independent retailers to trade as the government forced them out of the high street. Now they can sell without heavy business rates and the tax on bricks and mortar retailers would have to face for inhabiting the high street. Amazon also has variety and choice, something that has been stamped out of our high street. Amazon is a giant the government well and truly helped build by forcing people away from overpriced, outdated town centres.
What will charging Amazon more mean? Will the government give all these charges back to the bricks and mortar retailers to pay to prevent job losses of their staff? Or will it be to cover the coffee shops missing tax payments? No. So how exactly does this make the field level? It doesn’t, at all.
People aren’t going to turn away from Amazon and move their buying habits back to the shops because governments aren’t addressing the full set, or truthfully any of reasons the high street is declining. The link between making the average British household worse off and spending habits has not been considered either seemingly. In some of these affected British household’s live business owners who are being squeezed from more than one direction in financial terms.
The government, in part, has enabled online growth by killing bricks and mortar retail. When looking for solutions, perhaps looking closer to the environments that have been created because of greedy taxes and then taking the appropriate steps to work with the high street, is heading in the right direction at the very least.