Business rates cuts are likely to give retailers the confidence to open more stores, according to a leading property consultancy.
The boost to store openings already appears evident, according to John Webber, Colliers head of business rates, who cited M&S plans, announced this week, for 20 new branches.
Overall, the rateable value of retail stores, on which the tax is based, is set to drop by 10% from April.
In some locations, rateable values will fall by 30% or 40%, according to Colliers, with large department stores and hypermarkets among the biggest winners.
M&S is investing £480m in an acceleration of its estate rotation, which it this week said would see 20 “bigger and better” stores opened by April 2024. Eight are to be full-line stores selling M&S’s complete clothing, home and food ranges.
Five of the eight full-line stores will be relocations for M&S into shopping centre units formerly occupied by Debenhams, in Leeds White Rose, Liverpool One, Birmingham Bullring, Manchester Trafford Centre and Lakeside Thurrock.
“Obviously other factors will play a part, but there is no doubt a more favourable business rates environment will help such store expansion,” said Webber.
Colliers estimates the rates liability of the old Debenhams unit in Birmingham Bullring will drop by 47% from April, working out as a saving of over £500,000 a year.
Read more: Why Marks & Spencer’s new stores are working so much better for the retailer
Across its portfolio, M&S can expect to save about 23% – or £70m – in its annual rates bill, according to the property consultancy.
M&S stores set to make some of the biggest savings include a retail park branch in Ashford, Kent, where Colliers expects the bill to drop 69%. M&S’s store in Bluewater Shopping Centre in Dartford is set to save 47%.
“Across the board there will be an overall substantial reduction, and [that] surely will be taken into account in M&S’s decisions to either keep stores open or open new ones.”
M&S is also closing 67 underperforming full-line stores in high streets and opening 104 Simply Food branches, in plans announced previously. It aims to have 180 full-line branches by April 2026, down from about 247, and grow the number of Simply Food sites from about 316 to 420.
It said this week its latest new store plans would create over 3,400 jobs.
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