The emergence of large numbers of American-styled candy stores across the West End over the last year has become a cause for concern amongst high street retailers, leisure businesses and hospitality owners alike.
Having weathered the storms of the pandemic, which saw footfall and revenues plummet during lockdowns, the West End was beginning to show signs of recovery. Sales were on the rise as domestic visitors flocked back to central London, reuniting with friends and family across the district’s world-famous shops, bars and restaurants. In order to sustain this recovery however, we must continue to present the most attractive streets possible – enticing visitors from overseas to return, and domestic shoppers to make the journey into the centre of our capital more frequently. The opening of the Elizabeth Line and dressing of our streets for the Jubilee quite rightly made us all feel proud of London.
But this welcome recovery of one of Britain’s national assets is being soured by the growth of these stores which add little to the West End’s appeal.
To fight back before it gets out of hand, we need to understand the driving reason behind these new players in the West End. Many of these stores are an unfortunate symptom of a particular tax system that is no longer fit for purpose and is actively harming Britain’s high streets – namely, business rates.
When it was established in 1990, the business rates system had its merits. It provided councils with a valuable and predictable revenue, but they are no longer linked to business performance. In the West End in particular they have become staggeringly high and act as a barrier to new businesses wanting to move into the district. Unlike leases, they cannot be negotiated down. And while many landlords have recently agreed new rents and terms with their tenants that reflect the impact of the pandemic and changing shopping and working practices, business rates remain stuck outdated in an era that no longer exists.
For some landlords this is a double hit. Many are already suffering as rents have fallen sharply or simply gone unpaid by struggling tenants. Now, with many more stores empty because of the pandemic, they also have to pick up the costs of business rates on these properties which are generating no income. This means that any new tenant, including these new candy stores, is better than waiting with an empty premise for the ideal tenant that meets the standards the West End strives for.
But the fundamental review of the business rates system promised by the government turned out to be a damp squib. Nothing fundamental has changed. So, the long-term solution to the empty shop problem has to start with a complete overhaul of the business rates system, ensuring that it is fit for our increasingly digital ways of working and that it fairly reflects the constantly changing environment in which retail and leisure businesses operate.
In the immediate term we need to give businesses greater flexibility to respond to these emerging consumer demands. By embracing more progressive planning and licensing policies and adopting a fresh approach to the delivery of improved street services, we will be able to create an inviting West End that attracts inspiring new brands and businesses to the area.
Local planning and licensing policies have been made more flexible to encourage new formats that complement the existing shops in the West End. We need more of this sort of positive approach to filling our empty units.
And with £150m already pledged by Westminster City Council to transform the wider Oxford Street district, we have a real opportunity to create an exciting new environment for returning visitors if we move quickly to make these improvements and accelerate this investment before it is too late.
So much is going right, from the completion of the Elizabeth Line to the construction of Outernet London which will create a new world-leading entertainment district. But for every step forward these make for the West End’s vibrant and viable future, every new candy store is a step backwards, exposing the unfair taxes our retailers are subject to.