London West End retailers pitch for help in tempting back shoppers

Retailers in London’s central shopping district are calling for more government action to help them weather a Covid-19 slump in sales that has proved longer-lasting than in other cities and towns. Among the ideas put forward by businesses that trade on and around Oxford Street, Regent Street and Bond Street […]

Retailers in London’s central shopping district are calling for more government action to help them weather a Covid-19 slump in sales that has proved longer-lasting than in other cities and towns.

Among the ideas put forward by businesses that trade on and around Oxford Street, Regent Street and Bond Street include allowing EU shoppers to claim VAT refunds, extending the business rates holiday and making public transport free to encourage day trippers and office workers to return.

Although there has been an improvement in recent days, visits to the UK’s premier shopping streets are still way down on pre-Covid-19 levels. Data from Springboard, a consultancy, showed that “footfall” in central London rose 12.7 per cent in the week to August 22 compared with the week before.

But it was still 62 per cent below the same week a year ago, a notably larger shortfall than the 50 per cent decline registered in regional cities and much more than the 30 per cent fall in outer London.

“We’ve been really disappointed by traffic in the West End,” said Brian Duffy, whose Watches of Switzerland group operates luxury stores on both Oxford and Regent streets. “We thought it would be better.”

Watches of Switzerland on Regent Street: ‘We’ve been really disappointed by traffic in the West End,’ says its chief executive © Tolga Akmen/FT

Much of the shortfall is attributed to a decline in tourist arrivals. According to the New West End Company, which represents 600 businesses, the area depends on overseas visitors for half of its £10bn of annual revenue.

NWEC’s chairman, Peter Rogers, has written to the government calling for the tax-free shopping system to be extended to visitors from EU countries once the UK’s transition period ends in December. The letter has been signed by over 70 executives, including retail groups ranging from Harrods and Selfridges to H&M and Debenhams.

“It is clear that the slow recovery of international visitor numbers will be led from Europe as traditional long-haul markets are slower to recover,” said Sir Peter, who suggested that immediate revenue losses to the government would be more than made up by additional economic activity.

Most businesses think tourist numbers will not recover in earnest for at least six months. A more immediate challenge is to increase the number of white-collar workers coming into offices rather than working at home, something the government is campaigning to encourage from this week, amid concern that city centres could be permanently scarred by the Covid-19 pandemic.

“Even two days a week would make a huge difference,” said Brian Bickell, chief executive of Shaftesbury. The property group owns 15 acres of commercial property in and around Chinatown and Carnaby Street.

Chinatown: ‘Even two days a week would make a huge difference,’ says the chief executive of Shaftesbury, which owns commercial property there © Tolga Akmen/FT

Jace Tyrrell, chief executive of New West End Company, said transport was a key factor. “People tell us they feel safe in West End shops and offices but they are reluctant to take public transport.”

Mr Tyrrell said offering a “first trip free” on public transport could help tempt people back. “The first trip is a bit like ripping a Band-Aid off but after that people will feel more confident.”

Ewan Venters, the chief executive of upmarket food emporium Fortnum & Mason, said that transport was one area where officialdom “could make a big gesture” akin to the Eat Out to Help Out scheme.

“I’d like to see [Transport for London] offer free London transport for September, October and November. It would send a strong message that we have got the network up and running and we want to see you out and about.”

He and others also said that the messaging from both the government and the mayor needed to improve. “The narrative today is that the virus is still out there. If I shouldn’t have gone to work in March why should I go in now?” said Mr Duffy.

The British Museum: its galleries have reopened to the public with safety measures in force after 163 days closed © Chris J Ratcliffe/Getty Images

Fully reopening theatres and galleries, alongside restaurants and retail, would also help. “The West End will not truly recover until theatres and galleries have reopened,” said Mr Venters. “They play a huge role in the overall ecosystem”.

Many retailers accept that Christmas, when most of their annual profit is made, is likely to be a muted affair and are already eyeing next March, when the year-long holiday from business rates comes to an end.

“The government needs to think long and hard about an extension to that because business is not going to be back on its feet by Easter next year,” said Mr Bickell.

The property levy, based on 2015 rental values, is widely loathed by retailers but its impact is especially acute in London — the annual business rates bill for Selfridges’ Oxford Street store alone is £17m.

“We are currently being crippled by rents and business rates disproportionate to turnover,” said Thierry Andretta, chief executive of luxury goods retailer Mulberry.

Mulberry on New Bond Street: ‘We are being crippled by rents and business rates disproportionate to turnover,’ says its chief executive © Tolga Akmen/FT

Mr Tyrrell described the system as “totally broken” and said the government should consider extending the holiday for international centres such as London or Edinburgh, where visitor numbers are still demonstrably lower.

“We think there are around 200 businesses that will either downsize or leave if rates are not resolved,” he said.

The government has pledged to review business rates but, without any further mitigation, retailers will be paying elevated bills until the next revaluation in 2023.

In the longer term, the West End’s challenges remain much as they were before the pandemic: improving air quality, access and cleanliness. Many are hoping that the much-delayed opening of the Elizabeth Line, crossing from west-east under London, will bring in more domestic visitors and reduce reliance on tourism.

But Mr Bickell does not believe that Covid-19 will mark the end of such urban centres. “The West End is unique in terms of the features it offers and things that make it work,” he said. “It will still have that buzz and magic.”

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