Retail inquiry: Tesco, Alliance Boots and John Lewis urge Government to act on business rates and skills

The select committee for the Department for Business, Innovation and Skills also heard from retailers including Marks & Spencer, Sainsbury’s and the Co-operative in the third evidence hearing, which for the first time heard from store groups. The committee has already heard from bodies including the British Retail Consortium and the Association of Town & City Management.

The burden of business rates was high on the agenda for retailers, as Alliance Boots chief executive for health and beauty Alex Gourlay said: “Rebalancing the cost of doing business in physical shops is a real place for Government to act.”

Directors from the Co-operative, Sainsbury’s and Tesco all agreed that business rates should be a priority issue for the Government to tackle.

Sainsbury’s director of corporate services and company secretary Tim Fallowfield said despite Sainsbury’s being the 46^th largest company in the FTSE 100, it is paying a £36m business rates bill, the 12^th largest rate of taxation on a business.

He added: “As online retail grows, there is an opportunity for debate in terms of redistributing the tax burden.”

Co-operative Estates managing director Martyn Hulme said it was key to look at the way business rates is calculated based on September’s RPI rate of inflation.

Tesco director of UK operational strategy and business planning David Hobbs said the retail sector is “disproportionately impacted” by business rates.

John Lewis’ store manager at the retailer’s Peter Jones store Tony Wheeler said: “The Government needs to rebalance business rates to address changes across physical and digital retail.”

Separately, Arcadia boss Sir Philip Green has demanded an overhaul of the business rates system, calling for a freeze on rates, according to The Telegraph.

The skills shortage among the UK’s youth was also addressed at the inquiry. Gourlay said there is “a gap between education and business” in the UK.

In addition, John Lewis online director Mark Lewis said that as online retail grows it has resulted in a skills shift more towards supply chain, customer service and IT jobs and away from shop floor positions.

Meanwhile, convenience store formats and click-and-collect were touted as potential high street saviours.

Sainsbury’s Fallowfield said: “Convenience stores can create regeneration on the high street.”

Marks & Spencer head of public affairs Tony Ginty said click-and collect “provides hope for the high street,” as the service pulls customers into stores and is popular among shoppers.

John Lewis revealed click-and-collect makes up a third of online sales, while Alliance Boots said half of its online customers choose the service.

Lewis added that infrastructure that supports high-speed connections should also be prioritised considering the rapid uptake of m-commerce.