American candy stores: Will the rash on Oxford Street ever clear up?

A third of the traders known for illegal activity and tax evasion stood shuttered on London’s busiest shopping street, while thousands of pounds worth of unsafe and counterfeit items were bagged and seized.

But, just a few months later, exclusive data shared with Retail Week by Local Data Company (LDC) reveals that the rogue traders are back to their old tricks, and the number operating from the street is back to peak levels.

So what damage have these stores done to what was once London’s most revered retail destination? And how can the rash of stores be cleared up once and for all?

Pervasive presence

Counterfeit Apple AirPods, own-brand supermarket chocolate dressed up as £8 Wonka bars, “Gucci” belts and vapes with outrageously high nicotine levels are just some of the items up for grabs inside the shops of Oxford Street’s resident rogue traders. 

The shady businesses have a rap sheet that includes everything from fleecing taxpayers out of millions in business rates to accusations of money laundering. The council has even heard reports of tourists being unknowingly charged considerably more than the value of their purchase, only to realise they have been scammed when they get home. 

The shops give London’s busiest shopping street a bad name and many retailers agree their pervasive presence may make them think twice about opening a location there. But getting rid of them is proving increasingly difficult and even if the council succeeds, more often than not the stores just pop right back up again. 

Candy stores have been rapidly spreading on the street since 2017 but it was during the pandemic, when many retailers collapsed during lockdowns, that they really took hold of the district. 

“Despite a turbulent few years, Oxford Street is still a flagship location for many brands, with high footfall levels across the week and international reputation still attracting a host of worldwide brands,” says LDC head of insights and analytics Ronald Nyakairu.

”However, units here demand some of the highest business rates and occupancy costs across the country and, as categories such as department stores, fashion and footwear fall in number, demand for space on Oxford Street has declined. Empty space left behind by CVA brands has been snapped up by new tenants, such as candy stores, as landlords struggle to find occupiers post-Covid.”

Because the pressure of business rates bears down on freeholders with empty shops, they often let to an intermediary who then lets to the candy retailers, giving them liability for business rates. 

While employing staff on minimal salaries, the retailers then avoid paying rates by providing false names and other incorrect details, leaving them free to quickly dissolve the companies when the heat is turned up on them.

If the council tries to recover the debt using bailiffs and insolvency action, it then cannot find the perpetrators and has no idea who it is looking for. 

The number of candy stores reached 29 in 2020 and they returned to that peak this month, with only 18% of the stores shuttered since November being replaced by a retailer offering a different category of goods. 

Of the 12 stores that closed in November last year, nine were replaced by a similar shop by February 2023. 

“Westminster City Council has energetically pursued unscrupulous traders who sell unsafe or fake goods and fail to pay business rates but we have always maintained this is a whack-a-mole activity,” says Westminster City Council leader Adam Hug. 

Reviving Oxford Street

When the council attempts a raid on a premises, the manager is never available and the council suspects the person behind the till has a scripted response to deter the action.

“We are dealing here with a sophisticated operation that is skilled at exploiting UK legal loopholes,” says Hug. 

“There is a glaring lack of governance around setting up companies in the UK with only cursory checks on who the directors are – there are more checks involved if you want to get a local authority library lending card.”

The council is now calling for help from the government to put a stop to the stores once and for all. 

“We need the new Economic Crime Bill to help clamp down on these loopholes and to provide government agencies such as Companies House and HMRC with the powers and funding they need,” says Hug. 

“As a council, we are doing all we can – but we need increased cross-government support to make life sour for the sweet shop racketeers.”

But there is a vicious cycle, as their presence acts as a deterrent to traditional retailers, leading to more empty stores and more opportunities for them to exploit.

All the while, Oxford Street does not look any better for it. The three stores that did not reopen as candy shops, or change hands to another retailer, are currently vacant and even if the council eradicated candy stores, it is not a guarantee that there will be any demand for the vacancies from retailers. 

“With the council now clamping down on these stores, landlords will need to be creative in order to fill these units,” says Nyakairu.

“Many will convert them for other uses such as flexible office space and residential, following the same model as John Lewis. The future of Oxford Street is likely to involve fewer traditional retail stores with more pop-up and experiential use of units, which will help maintain the vibrancy of the area in order to continue to attract shoppers from all around the world.”