Alistair Darling is a busy man at the moment, so perhaps it’s an achievement in itself that he has responded to Retail Week’s Rate Rage campaign and acknowledged the severe problems that retailers are facing.
What is less good news is that he is refusing to budge over the 5 per cent rise in rates that is taking place next month, or over the further huge rises that the revaluation next April will lead to.
He is making a terrible mistake. In his letter to Retail Week, Darling points out that to freeze business rates this year would cost the Exchequer£1bn. Maybe so, but not only is the rise only happening because of the freak timing of the peak of inflation, but the£1bn would pale into insignificance compared with the bailout given to the banks.
It is also a politically foolish move. The inevitable desolate high streets resulting from retail collapses are moving up the agenda of MPs and the national media. Suddenly, retail is starting to matter.
Darling has left us with a glimmer of hope that the system can be reviewed in the longer term, and we should of course welcome that he’s prepared to listen. But this isn’t a long-term issue, it’s an immediate issue, and by the time the 2010 revaluation has been and gone, it will be too late for many.
Browett gets a break
He won’t have had many in his first 15 months in charge, but this has been a good week for DSGi boss John Browett.
First he revealed plans to roll out his new-format stores, which are outperforming the rest of the chain. That’s no surprise – as long as they can get the service right, they are a big improvement on what’s gone before. The next day, Best Buy confirmed that its UK debut is likely to be delayed until 2010, citing that it would make more sense to hold off acquiring shops, which is rather odd given that you can hear the wind whistling through most major retail parks at the moment.
Best Buy is a formidable business, but even it has not proved immune to the US slowdown. Browett said from the start that Best Buy will find it harder than it thinks to make the impact it wants here. The decision to delay its entry not only buys him time, but makes it more likely he’ll be proved right.