Business rates may not mean wholesale store closures, but they will sadly mean poorer shops.
The hammer blow that has been dealt to London in the form of the business rate increases that have just been unveiled is likely to mean an overall downgrading of the quality of shopping in the Capital.
Labour, rent and business rates are the three things that, in combination, hold the key to the cost of retail being affordable or beyond the pale.
And the way things look, the unaffordable threshold may just have been crossed.
Something has to give. Now think about what you see when you wander along Regent Street, Tottenham Court Road, Oxford Street or, a little further afield, Brompton Road or perhaps the Kings Road.
All of these thoroughfares are choc-full of new stores and the great majority of them are worth giving more than a once-over.
This is what makes London not just the best place in Europe to shop at present (and a source of huge amounts of tourist revenue), but debatably the leading world city in this respect.
A vast amount of money - picture Uniqlo on Oxford Street or the new Polo Ralph Lauren on Regent Street for example - has been poured into the area to make the shopping worth stopping for.
All of this will have to come to an end however. If you double the cost of business rates (more, in some cases), even if it is phased in, it is unreasonable to expect that creating shops that make the shopper stop and stare is set to continue.
The truth of the matter is that, as Lord Wolfson commented recently, shop prices are likely to rise in 2017 as a direct result of Brexit.,
Now store interiors seem set to be set in aspic as far as refurbishments or new environments are concerned, thanks to increased business rates.
It just won’t make sense to do much else and for listed retailers in particular, the demands for profit from the City are likely to be no less rapacious than usual.
Expect the following therefore. Shops in which the merchandise will cost more and which, over time, will look a bit tired.
The best may already be behind us and the road ahead, thanks to a series of blunders, miscalculations and, yes, greed, may be what awaits.
Meanwhile, London’s competitors in this arena, New York and Tokyo with Berlin and Paris not far behind, will grasp the opportunity to do more.
They will flourish. London’s retail offer will not.
- John Ryan is stores editor of Retail Week