Dixons boss Alex Baldock: ‘Business rates reform will save jobs’

The electricals business received £103m in government furlough payments and business rates relief during the pandemic but said that this could not counterbalance the loss of store sales when forced to close over the lockdown period.

Dixons Carphone saw a 17% increase in like-for-like sales in the first half to October 31, with adjusted pre-tax profits of £89m, but unlike several other retailers has made the decision not to repay the business rates relief. 

Baldock said: “Let’s remember that we were tagged as non-essential by the government, we had our stores closed on us for four months of the year, and the fact that we’ve been able to come through this and perform strongly certainly isn’t because anything has been handed to us on a plate. 

“It’s because of two years of hard work – the strategy that we set out to make the most of the strengths of this business and to build on them are coming good.

“This is a business that had it all to do. We had a big challenge in front of us and I think it’s a tribute to the colleagues that we’ve come through as strongly as we have.”

He added: “I do want to make the point that there’s a great deal of difference between our situation and the situation of some others.”

Baldock insisted the retailer has “behaved responsibly” during the pandemic, using the government schemes such as furlough “exactly as intended to preserve jobs” and has not made any Covid-related redundancies.

While he did not rule out repaying the rates relief in future, Baldock maintained that while trading remains uncertain, it wouldn’t be appropriate.

The chief executive proposed that business rates should be reformed to more accurately reflect the current rental prices, rather than implementing an online sales tax, to even the playing field between retailers

He said: “Retail as an industry accounts for 5% of the economy and pays 25% of rates. 

“There are tens of thousands of otherwise viable jobs that are at stake unless there is a fairer resettlement of the rates burden. 

“There’s a very easy way to do that, which is to resettle rates based on current rental values, not lagging for years. The government has been very quick in some areas in this crisis and it needs to be quick here too. 

“The rates need to catch up with where rental values are right now. What that would mean is that the rateable values of warehouses go up and of retail property goes down. 

“The benefits of that are that it would be fairer, for a start, largely if not entirely self-funding and would benefit not only retail but also hard-pressed leisure and hospitality for whom the rates burden is also an issue, and it would get people like Amazon to pay some tax.”

He added that an online sales tax would likely add to retailers’ tax burden.