Tesco boss demands new tax online retailers to save high street
- Credit: Suzanne Day
The head of Tesco has called for business rates to be cut and replaced with a new tax for online retailers in a bid to save the declining high street.
Chief executive Dave Lewis has warned out of date taxation systems are placing extreme pressure on thousands of businesses - stifling innovation in the process.
MORE: 'Mounting debts' force family-run Ipswich garage to close down after nearly 30 yearsIn recent months Ipswich has lost a number of stores as businesses struggle under the strain of tough business rates.
Last week, Trespass outdoor clothing announced it would be closing its store in Westgate Street.While jewellers Riley & Riley also revealed it would be closing its Buttermarket store after 15 years.
Business rates were also cited as a contributing factor in Debenhams' financial woes earlier this year.
Mr Lewis believes rates must be cut by a fifth - with the reduction paid for with a 2% targeted levy on web retailers' revenues.
"It doesn't matter whether you are a large retailer such as Tesco, or run an independent corner shop," he said, "business rates have a huge impact on every bricks-and-mortar retailer. This is unsustainable."
You may also want to watch:
Currently the amount a business pays is calculated with the value of its physical premises.
While online retailer can operate from out-of-town warehouse worth far less than property in town and city centre - meaning their rates are usually significantly lower than traditional firms.
- 1 Jack Whitehall praises award-winning Suffolk gastropub after visit
- 2 Glass found in popular paddling pool forcing it to close
- 3 Inside Ipswich's Blitz-themed tearoom
- 4 Caravans pitch up at Felixstowe park
- 5 Kesgrave care home manager denies hosting party in breach of Covid rules
- 6 Two men arrested after police uncover cannabis farm
- 7 School with 'sky high' ambitions aims to be 'best in Ipswich'
- 8 Coronavirus 'growth rate' rises further in East Anglia
- 9 GP surgery with more than 3,000 patients announces closure
- 10 If your surname is on this list you could be sitting on a fortune
"Our business rates system has barely evolved since 1988, yet the way people shop has changed profoundly," Mr Lewis said.
"Online retail has grown dramatically, while sales in shops have fallen. Healthy competition between shops and online is good for customers, and drives innovation.
"But the ability to compete is undermined when the playing field between shops and online is not level."
Mark Riley, of Riley & Riley feels the Tesco boss' idea could be a way forward.
"I do like the idea trying to level the playing field", he said, "if everyone contributes everyone will probably pay less.
"The prospect of internet businesses paying a bigger share is very appealing to me but there is a case for that.
"Because the market has changed and retail has changed the council needs to look at changing. It makes logical sense."