- Carpetright boss Wilf Walsh hits out at plans to devolve business rate powers
- Walsh claims the Chancellor’s move “is not the answer” to the “problem”
- Walsh fires warning to rivals as Carpetright’s UK market share hits 25.7%
Carpetright boss Wilf Walsh has slammed the Government’s decision to abolish the uniform business rate and devolve power to local authorities.
Walsh admitted that business rates were “a problem” for the retail industry and insisted the ruling Conservative party’s decision to empower councils was “not the answer.”
Chancellor George Osborne unveiled the controversial policy at the Tory party conference back in October in a move designed to allow councils to boost business and economic activity in their areas.
“Devolving it to local authorities is not the answer. Retailers in general are paying 23% of the overall business rates burden. It’s too high and it’s inequitable”
Wilf Walsh, Carpetright
Local authorities will be able to cut the tax “as much as they like”, but directly elected Mayors will also be able to add a “premium” to business rates to help fund infrastructure.
Those plans were confirmed during Osborne’s Autumn Statement, when he also revealed that the results of a long-awaited review of business rates would not be unveiled until the March Budget.
In the wake of the delay, property consultant Colliers International warned that retailers should brace themselves for a drastic shake-up to the amount they shell out in business rates.
Speaking after Carpetright unveiled a 34.3% hike in underlying pre-tax profit to £9m for the six months to October 31, Walsh reaffirmed his confidence in the retailer’s strategy, but admitted he was concerned about the impact of business rates on the retailer’s cost base.
He told Retail Week: “We are very clear about our plan, we are very focused on what we are doing and we’re not getting distracted.
“If I was worried about anything it would be macros outside of our control, and that’s really around consumer confidence – which I think is slightly fragile – and business rates, which remain a problem.
“If you consider that we trade in 125 fewer stores than we did six years ago and our rates bill is higher, you’ve got to ask the question: ‘What’s all that about?’
“I’m beginning to think the Chancellor doesn’t like shopkeepers. In a relatively benign tax economy and landscape, it sticks out like a sore thumb.
“Devolving it to local authorities is not the answer. We are aligned with the BRC on this – retailers in general are paying 23% of the overall business rates burden. It’s too high and it’s inequitable.”
When asked what the answer was to the problem, Walsh said: “Freezing it and then reducing it. It might sound like a blunt instrument, but that’s my position.”
Warning to rivals
Carpetright’s half-year like-for-like sales rose 3.7%, driving its market share in the UK to 25.7% - up from 22.7% five years ago. That has been boosted by a store modernisation programme and the roll-out of concessions in Homebase shops and department store retailers across the UK.
“We are quite happy to go head to head with the competition and slug it out.”
Wilf Walsh, Carpetright
And Walsh laid down the gauntlet to his rivals who may seek to claw back market share by setting up shop in the vicinity of existing Carpetright stores.
“Where we go head to head with a competitor on the same site, we grow like-for-like sales faster than the rest of the chain,” he said.
“We are quite happy to go head to head with the competition and slug it out based on our website, our marketing package, our range, our service, our reputation for value and most importantly our people.
“We think we can gain market share by doing everything better than the competition and that remains our absolute focus.”