UK Retailers Warn Business Rates Hike Could Close Up to 400 Stores — BRC

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 What the BRC Is Warning

  1. What the Proposal Is
    • The government is proposing a new, higher business rates (“surtax”) band for commercial properties with a rateable value over £500,000. (Investing.com)
    • The rationale: use this additional revenue to fund a permanent discount for smaller retail, hospitality, and leisure premises. (Investing.com)
  2. Stores at Risk
    • According to BRC analysis, up to 400 large-format retail stores (supermarkets, department stores, etc.) could be at risk of closure if the surtax is applied to them. (brc.org.uk)
    • There are around 4,000 large retail stores in the UK with a rateable value above £500,000. (brc.org.uk)
    • These large stores are “anchor” retailers — they attract footfall, support surrounding smaller shops, cafés, and other high-street businesses. (The Standard)
  3. Economic Impact
    • If up to 400 stores were to shut, the BRC estimates that up to 100,000 jobs could be lost. (brc.org.uk)
    • Local councils could lose well over £100 million annually in business-rates receipts from retail if these closures happen. (brc.org.uk)
    • Retail accounts for ~5% of UK economic output, but pays over 20% of all business rates, according to the BRC. (Insider Media Ltd)
    • Large-format stores alone pay around a third of the total business rates bill for the retail sector. (The Standard)
  4. Why This Is Dangerous for High Streets
    • The BRC argues that these large stores are vital anchors. If they close, not only do the big shops suffer — high streets, shopping centres, and surrounding small businesses (cafés, pubs, independents) could lose footfall. (The Standard)
    • Because retail profit margins are very tight (e.g., 2–4% for food retail), a big increase in business rates could force big shop owners into raising prices, cutting staff, or shutting outlets altogether. (Fibre2Fashion)

 Key Comments & Demands

  • Helen Dickinson, Chief Executive of the BRC:

    “Britain’s largest shops are magnets, pulling people into high streets … supporting thousands of surrounding cafés, restaurants and smaller and independent shops.” (brc.org.uk)
    She warns: 400 more large stores could disappear if they’re put into the new high tax band — which would mean up to 100,000 job losses, emptier high streets, and less revenue for the Exchequer. (The Standard)
    Her ask: exclude these large shops from the new surtax band and instead slightly raise the rate on other big non-retail properties (like large office blocks), where closing them would have less economic damage. (brc.org.uk)
    She argues this could be done “without cost to the Exchequer” but would help secure the future of these 400 stores and the communities they support. (The Standard)

  • Industry Concern:
    • Retailers argue that shifting costs onto big shops is “massively damaging” to high street ecosystems. (UK Estates)
    • There’s a risk of a domino effect: if anchor retailers close, smaller independent stores nearby could suffer from reduced foot traffic. (The Guardian)

 Analysis & Implications

  • High-street viability is at stake: This isn’t just about big shops — it’s about the whole high-street ecosystem. Anchor stores draw people, which supports smaller businesses.
  • Job risk: 100,000 potential job losses is a major economic and social risk.
  • Long-term fiscal risk: If shops close, councils lose business rates revenue — meaning the government could ironically lose money in the long run.
  • Political leverage: The BRC is using this warning ahead of the Autumn Budget, putting pressure on policymakers to carve out an exception or reform.
  • Trade-off challenge: The government’s proposal is to tax big commercial properties more to help smaller businesses — but retailers argue that the harm to big stores (and by extension, the high street) may outweigh the intended benefit.
  • Here are case-style examples and commentary based on the BRC’s warning that up to 400 large UK stores could shut if a business rates hike goes ahead — plus the implications of their argument.

     Case Studies & Illustrative Scenarios

    Case Study 1: A Major Supermarket Chain (e.g. Tesco or Sainsbury’s)

    • Situation: Some of these large-format supermarkets likely have rateable values above £500,000 — putting them in the proposed “surtax” band. (Investing.com)
    • Risk: According to the BRC, higher business rates could force them to:
      1. Raise prices, squeezing consumers. (brc.org.uk)
      2. Cut jobs to absorb costs. (Business Money)
      3. Close marginal stores that are no longer profitable. (Insider Media Ltd)
    • Broader Impact: As anchor retailers, these supermarkets draw footfall to shopping areas. If they shrink or close, it could hurt nearby smaller shops, cafés, and independents. (brc.org.uk)
    • BRC’s Recommendation: Exclude these large stores from the new higher rate band, and instead raise rates slightly on other large non-retail buildings (e.g. office blocks) where the social and business risk is lower. (brc.org.uk)

    Case Study 2: Department Stores / Large Retailers (e.g. John Lewis)

    • Situation: Department stores often operate on tight margins; the BRC says that many large-format stores already face “soaring employment costs, high taxes, and rising rates bills.” (London South East)
    • Risk: The surcharge could push them to:
      • Scale back store footprint
      • Reduce staff
      • Possibly shutter some stores, especially those that are underperforming or in less busy locations
    • Jobs Risk: The BRC estimates that up to 100,000 jobs could be lost if all the 400 “at-risk” stores close. (brc.org.uk)
    • Community Effect: Department stores play a key role in high streets and shopping centres. Their closure would likely weaken local economies, reduce footfall, and harm smaller neighbouring businesses. (The Independent)
    • BRC’s Demand: Use the upcoming Autumn Budget to protect large retail properties from this surtax, arguing that exempting them would not cost the Treasury yet would maintain high street health. (brc.org.uk)

    Case Study 3: Impact on Local Councils & Public Revenue

    • Situation: Local councils rely significantly on business rates paid by large retail stores.
    • Risk: If 400 large stores shut, BRC calculations suggest that local authorities could lose well over £100 million annually in business rates revenue. (brc.org.uk)
    • Broader Concern: Reduced revenue could weaken local public services, especially in areas already struggling with high street decline.
    • Policy Ask: The BRC argues that tax reform (excluding these big retailers from the surtax) is not just pro-retail but pro-communities and local government.

     Key Comments & Analysis

    • Helen Dickinson (BRC CEO):

      “Britain’s largest shops are magnets… pulling people into high streets, shopping centres … supporting thousands of surrounding cafés, restaurants and smaller and independent shops.” (brc.org.uk)

      • She warns that 400 more large stores could disappear if the surtax is applied. (Insider Media Ltd)
      • She argues that excluding large retailers from the surtax “would not cost the Exchequer a penny,” but would protect jobs and the high street. (The Independent)
      • She says failure to act risks “shuttering hundreds more stores, costing jobs, communities, and the economy far more in the long run.” (Insider Media Ltd)
    • BRC’s Broader Warning:
      • Retailers already pay a disproportionate share of business rates: large-format stores (rateable value > £500,000) make up ~1/3 of the retail sector’s business rates bill, despite being a smaller fraction of total commerce. (brc.org.uk)
      • Over the past five years, according to BRC, 1,000 large outlets have already closed — showing that these businesses are under real, sustained cost pressure. (brc.org.uk)
      • The BRC frames its ask not just as protecting retailers, but defending anchor tenants that support entire high-street ecosystems.
    • Economic Risk:
      • If 400 large stores close: ~100,000 jobs could be lost. (Business Money)
      • Local councils would lose £100+ million/year in business rates income. (Business Money)
      • Higher business rates could lead to price increases, harming consumers — especially at a time when margins are tight across the retail sector (food retailers typically operate on 2–4% profit margins). (Insider Media Ltd)
    • Policy Proposal:
      • Exclude “large-format” retail stores from the new “higher business rates” band. (Business Money)
      • Instead, increase rates modestly on other large non-retail commercial properties (offices, big non-retail buildings) where the economic and social cost is lower. (brc.org.uk)

     Implications & Strategic Risks

    • High-Street Decline: If anchor stores close, the high street could suffer a domino effect — reduced footfall, more vacant units, and a weaker ecosystem for smaller businesses.
    • Job Losses: Widespread closures could lead to significant unemployment in retail, hitting both national and local economies.
    • Political Pressure: The BRC’s warning puts strong pressure on the government ahead of the Autumn Budget to defend large retailers.
    • Tax Trade-Off: The government’s goal is to make a permanent business-rate cut for smaller retail/hospitality premises — but shifting the burden onto large stores may backfire if it leads to widespread closures.
    • Long-Term Shift: Retailers may re-evaluate their brick-and-mortar strategy (store size, number of outlets) if cost structures become too risky.

     

Categories: GB News, UK News