Lord Wolfson, chief executive at Next, fears there has been a permanent shift to online shopping and that high street retail will be forced to adapt.
In an interview with the BBC, Lord Wolfson said there was a clear threat to thousands of traditional high street retail jobs, which are now "unviable", as shoppers have increasingly embraced online shopping during the coronavirus pandemic.
"I wouldn't want to underestimate the difficulty that is going to cause a lot of people who work in retail, I think it's going to be very uncomfortable," he said.
His comments came after the chancellor announced a new Job Support Scheme that would see the government top up the pay of people unable to work full time, although not to the same degree as the current furlough scheme and at a greater cost to employers. Although Lord Wolfson welcomed the chancellor's announcement, he said it was important that businesses eventually learn to live without government support.
"It seems like a very sensible scheme to me," he commented. "I think it's important that employers begin to pay a little bit more for the schemes and that employees get a little bit less - because otherwise I think there's a risk that our economy will just become hooked on it."
Lord Wolfson believes that prudent management can help mitigate the challenges that retailers are facing. He has stated that compulsory redundancies in his own business would be minimal, and new jobs would be added in call centres and distribution centres: "We think by the time it gets to the end of October, there'll be enough work through the normal build up to Christmas to employ all the people that we've currently got on furlough," he explained.
Lord Wolfson also spoke about the future of retailers based in city centres: "I think they're going to have to change and change very radically." He has suggested that change should come from "the bottom up", driven by entrepreneurs. He added that freeing up property would be good for the country, especially if the government allows people to repurpose those sites: "If city centres and town centres are going to regenerate, it is only going to be from the investment that landlords make in those properties."
Business rates remains an area of concern for Lord Wolfson, as they become increasingly divorced from the value of the properties on which they are charged. "Rates have become unfair," he said. "One of the great principles of taxation is that it should be in proportion to your ability to pay. A gulf has opened up between what rates were being charged and what rates we should be charged at a fair price."
One sugggestion to fill the shortfall to the government by reducing business rates on high street properties is to increase rates on the warehouses and logistics centres of online retailers. "Over the last six or seven years, the price of warehousing has gone up dramatically, and the price of shops have come down dramatically, but both of their rates have remained exactly the same, " said Lord Wolfson. "You could raise rates on warehousing between 30% and 50% and that would make up for some of the loss and that would be fair."