Twenty thousand stores face closure over the next 12 months, with five or six big names at risk, according to analysis in the Grimsey Review of the high street.
Fashion stores and small electricals shops will take the biggest hit according to the team behind the review led by former Wickes boss Bill Grimsey. The team studied the accounts of 44,000 UK retailers.
It is one of 31 recommendations Grimsey is making to the Government, which also includes urging retail and leisure chains to stump up cash to help sponsor start-ups and revive struggling high streets in a one-off levy. The review is published on Wednesday.
Grimsey will urge retailers and leisure firms to invest 0.25% of 2014’s sales into a “fighting fund” to help rescue town centres.
The review has calculated that this investment would amount to around £550m, which would be spent on new high street ventures.
Grimsey said it is time the big retail chains, which have made a lot of money out of the high street, “put something back”.
He said: “I honestly think the time has come for the big chains to put something back and help re-design the high street.
“What we’ve seen in a lot of secondary town centre locations is that as the chains move out to more lucrative out of town sites they’re hollowing out the high street.”
Grimsey said a levy would work best if the money were administered through a central fund overseen by independent trustees that would include some of the biggest contributors to the fund.
Grimsey added: “The big players could achieve far more than the Government has and leave a lasting and powerful legacy.”
The findings come as Mary Portas, who was commissioned by the Government to produce a review of the high street in 2011, is set to mount a defence of her efforts to revitalise the high street in front of MPs today.
She will be questioned at a Communities and Local Government Committee meeting.
In the foreword to Grimsey’s review, which is unveiled on Wednesday, he said that the Portas Review, which contained 28 recommendations, “promised the Earth but delivered little”.
Grimsey will call for a high streets minister to be appointed and for cuts in crippling business rates. He plans to invigorate streets by setting up “town centre commissions”, which will help to bring together leisure, stores, health centres, education and housing and create a 20-year vision for the area and trial the process.
Regarding the business rates system, the Review is calling for a “immediate” reintroduction of the 2015 business rates revaluation, which has been delayed by the Government to 2017. It then urges for annual revaluations from 2017.
To tackle parking issues, it recommends that town centres offer two hours of free parking and freeze car parking charges for at least 12 months.
The Review also plans to get empty shops back into use by offering incentives to new businesses taking on the site, extend the change of use process to convert entire secondary high streets to residential or other uses, while landlords should be required to make the site a benefit to the local community.
BRC director general Helen Dickinson said: “We believe that Bill Grimsey is right to focus on business rates reform. There is a growing consensus that the business rates system is no longer fit for purpose, and a complete reform of it would be the single most important step towards reviving our high streets and boosting retail jobs across the country.
“The full review will be published on Wednesday, but there are a number of interesting ideas being reported already. We support the idea of keeping parking charges low and improving access to town centres which we agree would help them flourish. However, we do firmly oppose the idea of a new one off levy on larger retailers. Any new approach must be fair for all, not a selective attempt to penalise one particular part of the retail sector.”
Grimsey Review warns 20,000 stores face closure
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Twenty thousand stores face closure says Grimsey Review as Portas faces MPs' questions