The UK Retail Sector Inquiry: What do retailers need to know?

Why are we talking about this now?

Retailers came under further pressure this week after they were hit with a 2.6% increase in their business rates bills on Monday. It is estimated this will cost them an extra £175m this year.

The rates hike comes as high streets struggle to survive in the face of online competition and a difficult economy.

Against such a backdrop, an inquiry has been launched to study the structural changes taking place in the industry.

What is the inquiry?

The UK Retail Sector Inquiry, which was unveiled last month, has called for evidence from interested parties, such as retailers, suppliers and landlords. The inquiry will be led by the Department for Business, Innovation and Skills Select Committee, chaired by Labour MP for West Bromwich West Adrian Bailey.

What will be analysed?

The issues covered by the inquiry will depend on what evidence is received, but Bailey says that the burden of business rates is a “major” concern for retailers.

In particular, it will look at how retailers with stores are disadvantaged by high business rates compared with online retailers. “If there is not a level playing field it will accelerate the problems of retail on the high street,” Bailey says.

“It is fair to say that over and above we will look at the development of online and look at the long-term impact.”

The inquiry will also consider how UK retail can further boost its global standing by exporting skills and expanding businesses overseas.

It will also study training and skills in the sector, which employs more than 3 million people.

The findings of the inquiry could be published as early as June, before Parliament goes into the summer recess.

How does it differ from the Portas Review?

The Portas Review, led by self-styled retail guru Mary Portas, focused on reviving ailing high streets and made 28 recommendations to the Government. This inquiry will look at the retail sector as a whole including out-of-town, high streets and etail.

Some issues discussed during the inquiry may cross over with material from the Portas Review.

However, Bailey says: “I don’t want a rerun of the Portas Review. When you look at the high street there has not been much improvement.”

Bailey says he hopes to reinforce some of Portas’ recommendations and urge the Government to take more direct action to aid retailers.