As a vibrant and innovative sector generating £326bn sales each year and directly employing around 3 million people, retail is one of the UK’s success stories.
However, three quarters of international retailers who contributed to the survey said that they would expand elsewhere in preference to the UK due to a number of perceived barriers, the most significant being business rates.
The findings are part of a new report by intu, owner of many of the UK’s largest and most popular retail destinations, and Revo, the voice of retail property in the UK, which outlines eight recommendations to capitalise on international interest and remove barriers to expansion.
David Fischel, intu chief executive, said: “The good news is that overseas retailers are interested in the UK because it is a large market, has sensible employment regulations, low corporation tax and a sound digital infrastructure.
“However, almost three quarters of the retailers surveyed said they would consider other countries in preference to the UK for expanding their business; with the stand- out issue being the high level of UK property taxes, especially business rates.
“This research further confirms our long held view that Government needs to review the entire structure of business rates which is currently a disincentive for inward investment and makes the UK uncompetitive.”
The research, conducted on behalf of Revo and intu by Conlumino among 130 international retailers, found the UK is seen as attractive across 36 key factors including solid economic growth rate, a sensible approach to labour relations, low corporate tax rate and sound digital infrastructure.
Ed Cooke, Revo chief executive, said: “Retail is a Great British success story, admired around the world for its creativity and innovation. The sector is supported by a dynamic and evolving retail property industry, which is adapting in response to retailer needs, shaped by changing consumer shopping habits.
“Although successful our research shows how, at a time of great political and economic uncertainly, we must take things to another level. Specifically, by looking again at property taxation, to create a more internationally competitive tax environment, and also by more actively prompting our market abroad.”
Other recommendations within the report include promoting the UK to international retailers, addressing issues relating to planning and providing more help to navigate the complex legislative and wider regulatory landscape.
130 international retailers with a collective turnover of £1.5 trillion were interviewed for the report, consisting of those already in the UK, those considering the UK for expansion and those where the UK is not on their expansion plans. They were asked about their international expansion plans and to rate the UK on 36 factors, identifying barriers to investing in the UK and ranking the UK against other retail markets.