The flagship John Lewis store at Cribbs Causeway in Bristol is among stores in the chain paying an annual business rates bill of over £1 million, according to analysis by real estate advisors Colliers International.
The Cribbs Causeway department store is one of 20 John Lewis department stores that have a rates bill of over £1 million for the 2019/20 tax year, while the entire business (not including Waitrose) has a business rates bill of around £57.4 million for the current year for a store chain of fewer than 50 shops.
Head of Business Rates at Colliers, John Webber – who has been campaigning for business rates reform – said the rates bill for the John Lewis chain highlighted the need for new chairman Dame Sharon White to add her voice to calls for change to what he described as the “punitive tax” of business rates, and tackle their damaging impact upon major retailers.
He pointed out that the current business rates bill for John Lewis is more than 30% higher than before the 2017 rating revaluation and would rise to a further £59 million next year.
“Maintaining a punitive tax system against the bigger retail players whilst providing relief for the smaller retailers, does little to prevent store closures and job losses as we have seen elsewhere in the market. When quality retailers like John Lewis start to feel the pinch, we know we are really in trouble,” he said.
He added: “Like other retail operations, John Lewis is facing rising costs which it is attempting to keep under control in a difficult market. Business rates are playing their part in keeping such costs high. It would be massively disappointing if the Government shows it has learnt nothing from the current retail predicament and goes down the downward transition route as it did at the last Revaluation.
“We need to allow retailers such as John Lewis a chance to ease their rates burdens immediately. Dame Sharon should join in the campaign to make sure this happens. Sadly, given recent announcements designed to help smaller retailers no one in power seems to appreciate that it is the bigger retailers, the chains that are the big employers in the sector.”
The analysis from Colliers International shows that the John Lewis store in Cavendish Square off Oxford Street, is facing a business rates bill of around £10.4 million this year. Twenty other John Lewis stores have rates bills of over £1 million each in the 2019/20 tax year. These are: Bristol, Reading, Cambridge, High Wycombe, Peterborough, Southampton, Blue Water, Nottingham, Manchester, Cheadle, Liverpool, Newcastle, Birmingham, Solihull, Leeds, Brent Cross, Kingston, Westfield, Milton Keynes and Cardiff.
John Webber highlighted the fact that all these business rates bill are set to rise further in 2020/2021 and are looking increasingly unsustainable in the current climate.
“The increasing shift to on-line shopping, rising costs, including the rise in the minimum wage and dampened consumer confidence are all taking their toll on traditional department stores and John Lewis is no exception. We understand it is looking closely at its management layers, its annual bonuses, its Christmas advertising spend and its position with its various landlords. With such a drop in sales, it is no wonder the company is needing to take defensive measures.
“But the business rates environment needs to be overcome also. Whilst John Lewis is currently negotiating with landlords over the rents and even the service charges that it pays, one area of costs, business rates, is set in stone – and there is no room for manoeuvre. And bills are likely to continue to rise over next year too.”
