It is no secret that high street retailers are struggling in today’s current climate. With the switch to online shopping and rising business rates, times are hard. The latest casualty last week was Debenhams, revealing that they are to close 50 stores and cut 4000 jobs, which is the biggest loss in its 240 year history. They have however denied that the company will be going through the insolvency process.
The budget this week has seen Phillip Hammond include a £675m Future High Streets Fund aimed to bolster the struggling high street with improved infrastructure and delivering footfall. He has cut a third off the business rates bill of 500,000 small retailers. A very welcome addition for those who have premises with a rateable value below £51,000.
Hammond also unveiled a new £400m digital services tax to be levied on the tech giants on the money they make on digital services like advertising and streaming entertainment (but not online sales).
So can these two measures save the British high street? Sadly it’s unlikely - at least not on their own.
Some tenants and landlords welcomed the move, however the business rates discount for small retailers would not have prevented any of the high profile retail busts this year - Rateable values on prominent High Street sites are usually a lot higher than the £51,000 threshold.
With many well-known and long standing companies going into administration would you have seen the warning signs? A good example of this is back in March this year when Toys R Us announced they were going into administration, CoCredo credit reports were showing 0 credit limit and maximum risk since December 2017.
CoCredo’s extensive monitoring service notifies you directly of any changes in a company’s credit limit and risk index. Ask your Account Manager about this service on 01494 790600.