As many as 80,000 shops could be at risk if business rates are not properly reformed, according to the British Retail Consortium.
Business rates are currently paid on 1.8 million properties in England, states HM Treasury. Retailers are disproportionately impacted by business rates, putting huge numbers of jobs and stores at risk, the BRC said.
In a “best case scenario” situation, the organisation estimated there will be 8,073 fewer shops by 2017 as online retail drives structural change in the industry.
With 60% of high street leases up for renewal in 2017 and fixed costs on the rise, retailers of all sizes may consider closing struggling stores, the BRC said. If 60% choose not to renew, there could by 80,369 fewer stores, accounting for more than 800,000 jobs.
In its submission to the Government consultation on business rates, the BRC said: “The business rates system is no longer fit for purpose in the 21st century and its structure, not just its administration, must be reformed. We recognise this will take time but believe the Government should define a roadmap for fundamental reform to be in place by 2017.”
The latest footfall data from the BRC and retail analysts Springboard showed May’s customer numbers were down 1% compared to 2014. Both high streets and shopping centres reported a decline, falling 1.5% and 2.0% respectively. Out-of-town locations saw a 1.4% increase.
BRC director general Helen Dickinson called for Chancellor George Osborne to address rates at next month’s Budget.
She added: “If he takes bold action on rates in his upcoming Budget, a crucial barrier to retailers driving growth in the north and across the rest of the UK, will finally have been removed.”