ALL PARTY SMALL SHOPS GROUP DEMANDS URGENT GOVERNMENT ACTION TO SAVE SMALL SHOPS

A Parliamentary Group set up by MPs to investigate the future viability of small shops have predicted a bleak future unless urgent government action is taken. The Groups recently published report High Street Britain: 2015 concludes that many of these shops will have closed within 10 years damaging the UK commercially and socially and calls on the government to act urgently to save Britain's small shops.

Commenting on the report Greg Mulholland, MP for Leeds North West and Member of the APPG on Small Shops said:

"It's clear from this report that the loss of small shops will damage the UK not only economically but socially and environmentally as well.

"The continued difficulties faced by small shops up and down the country have been ignored by the government for far too long.

"If the government does not act soon British retailing will struggle to recover and could possibly be damaged forever.

"Local communities need to be given the opportunity to make more decisions to allow a more level playing field for all retailers which has until now been heavily weighted to the advantage of large retailers.

"We risk loosing choice where we can shop and what we can purchase, reducing quality and diversity while at the same time loosing an important part of the heritage and culture of towns."

KEY FINDINGS OF THE REPORT

1. Large retailers employ anti-competitive practices in the face of tough, local/regional, competition from small businesses.

2. Despite an accurate recognition of the problems inherent within the sector in the 2000 report published by the Competition Commission, the regulation of the sector has been poor with few effective measures to sustain a competitive market in the long term.

3. Consumers to lose out if current trends continue. Restricted choice of store brands, restricted choice of available products restricted choice of shopping locations, higher prices and reduced customer service are all strong possibilities in 2015.

4. Ethnic minorities, immigrants, the elderly and those living in deprived areas are expected to be the worst affected at all levels of engagement.

5. A concentrated supply chain extends the risk to the whole nation which will become vulnerable to severe problems, for example, contaminated food, or food shortages brought about by disruption to the distribution system. With this in mind alternative sources of supply should be protected regardless of their profit making efficiency.

Responding to the second finding of the report Greg said:

"The implementation of a Code of Practice that suppliers feel too intimidated to use because it cannot guarantee anonymity is reflective of this.

"It is now believed that abuse of suppliers by larger competitors, whether intentionally or unintentionally, is now so widespread that even transparency in the prices paid to suppliers by all retailers would not fully reveal the unbalance within the market."

Responding to the third finding of the report Greg Mulholland said:

"Although some consumers today may be benefiting from a competitive market this is entirely unsustainable and cannot continue.

"The erosion of small shops is viewed as the erosion of the 'social glue' that binds communities together, entrenching social exclusion in the UK."

Responding to the fourth finding of the report Greg Mulholland said:

"Everybody has the basic human right of access to healthy and affordable food. Consolidation will take this right away from many people depending on their mobility, income and the area in which they live. "

KEY RECOMMENDATIONS OF THE REPORT

• IMPLEMENT A MORATORIUM ON FURTHER MERGERS AND TAKEOVERS UNTIL THE GOVERNMENT HAS BROUGHT FORWARD PROPOSALS TO SECURE DIVERSITY AND VITALITY OF THE RETAIL SECTOR

There should be a moratorium on any further mergers and takeovers until there has been sufficient structural change regarding the regulation of the retail sector for a market study to commence.

• ESTABLISH A RETAIL REGULATOR

We have found that the responsibility of maintaining a vibrant, diverse and sustainable retail sector falls outside the remit of the OFT who are principally bound to consider competition concerns to the exclusion of the other social and non commercial benefits generated by independent retailers. The new regulator would:

1. Undertake full investigation of grocer sector and non-food retail;

2. Oversee the moratorium;

3. Bring forward proposals for the maintenance of a vibrant, diverse and sustainable retail sector;

4. Provide support to local authorities developing retail strategies

• DELEGATE GREATER POWER TO PEOPLE LOCALLY

There needs to be a revision of the financial and planning powers of local authorities with more explicit consideration given to protect diversity and vitality of local retailing. There needs to be a review regarding alleged abuse of resources by large businesses. This should be compounded with greater consultation between the council and local communities regarding the developments within the area.

• Institute a review of business rate relief

The APPG have found that the operation of business rates militates against the growth of small retailers, particularly on Britain's high streets. We believe that ODPM should undergo an urgent review of how the rate relief system operates for vital community services, including an assessment of how the Valuation Office rates out of town and town centre properties.