Taxing online sales may be the way to save the high street
Posted on in Business News
Mike Ashley, Sports Direct founder and chief executive, spoke to Parliament's Housing communities and local government committees this week.
Ashley said that a 20% tax on retailers that turn over more than 20% of their business online would make retailers desperate to keep their high street business running.
As a retailer himself, Ashley said that:
"If I'm a retailer I will make sure not to pay 20% tax, I'd keep 80% of revenues going through the high street - I'd stop closing three stores into one. I'd now say it make perfect sense for me to cross subsidise those stores and keep it open. What's more, what I'd like is if we had click and collect through high street stores, that acts as a credit".
Click and collect as a feature encourages shoppers to come into the stores, it also means that shoppers are coming through the high street increasing foot traffic. But this is not just it, councils, landlords and retailers must all work together if they want to save the high street.
Ashley, argues that the high street is failing because of the internet. With a £400m internet business, the thing that is affected most by this business is the high street. In Ashley's mind the high street and department stores, which is a good concept, need to evolve and be different. Department stores are stuck with prehistoric rents and stopping them from moulding with the changing retail environment.
In his mind, there is a fix for the failing high street and it is not to fight against the internet and its presence in our lives but to work harmoniously with the internet and the community that makes up the high streets.
Although, Ashley has caught the attention of many M&S, New Look and Lakeland Leather were also at the hearing with opinions of their own.
M&S is looking to rebalance online sales with its store, with New Look focusing on its customers and what they want from its stores.
M&S has said it plans to close 100 full line stores as it move more clothing and homeware sale online to target the 33% of sales.
New Look, is also closing stores on the high street to rightsize its store estate for a future that is more online. This decision was driven by the customer.
Lakeland Leather are getting more into personal shopping and experiences with fashion shows in-store, connecting bricks and mortar to online.
The 33% of sales that took place online during Black Friday have not only affected how consumers shop at Black Friday but how they shop all year round.
What do you think?