Retail crisis sees nearly 14,000 shops shut
Transformation of the high street will impact organisations operating charity shops, charities that own properties and charity investors.
The Centre For Retail Research estimates that 13,867 shops have pulled down their shutters for the final time this year. The coronavirus pandemic and the switch to online retailing are transforming the high street, and thousands of shops closing down - probably forever.
Industry body the Centre For Retail Research estimates that nearly 125,000 people working in retail have lost their jobs this year.
The Centre says non-food retailers have lost £9bn in sales during the year to date, and shop closures are up by a quarter on the same time last year.
Impacts on landlords and charity investments
COVID-19 and lockdown measures have added to long-standing pressures on the high street as consumers switch to online shopping. As well as shops, businesses suffering include pubs and restaurants, hotels and travel agents, as well as gyms and serviced offices.
With thousands of retail spaces closing and offices remaining empty, rents are not being paid and commercial landlords are seeing huge falls in income. This is a concern for the many charitable organisations and trusts that have invested in property funds.
Many commercial landlords are scrambling to find ways to ‘re-purpose’ their retail spaces. International property consultancy Altus Group surveyed 400 property development executives for its Global Property Development Trends report and found that 38% of executives were switching their retail properties to other uses, and a further 57% were considering doing the same.
Rating reform campaign continues
Business rates are another concern. The British Retail Consortium is one of many organisations campaigning for a reform of the rating system, saying it is critical that the business taxation system is updated.
The Government gave retailers, pubs and leisure service companies a business rates holiday this year, but there is concern that Chancellor Rishi Sunak has not given any updates about the future of the rating system.
In July, the Government issued a call for views on how the business rates system currently works, issues to be addressed, ideas for change and alternative taxes.
London Mayor Sadiq Khan and London councils have urged the Government to extend the rates holiday for another year over fears thousands of jobs could be lost in London.
Meanwhile, the government has set up a ‘High Streets Task Force’ to provided support to town centres and high streets in England. The Task Force has published a COVID-19 Recovery Framework to help local centres plan and prepare for recovery. The Framework sets out a series of measures for local centres, across four stages: Crisis, Pre-Recovery, Recovery, and Transformation. The approach is modelled on disaster management processes.