Weekly Retail & Leisure News - 21 March, 2016
In last week’s Budget, the chancellor announced a number of changes to the business rates system. Notably the threshold for small business rate relief will rise from £6,000 to a maximum of £15,000.
Tim Beattie, head of Rating at JLL, commented: "although it has been a long time coming, it's very welcome news for the 600,000 small businesses that stand to benefit. Additionally, the chancellor announced a change in the link of the rate measurement to CPI from RPI. Beattie continued, “it is something that retailers and businesses have been clamouring for years and while this is positive news, it seems a little odd that it is being introduced in 2020 when there is no reason why it can't be implemented now.” The chancellor also announced that he aims to introduce more frequent revaluations; “this will ensure that liabilities are much more aligned to the prevailing economic conditions going forward,” Beattie added. In other positive news for the UK retail market, the chancellor announced plans to take measures to stop overseas retailers storing goods in the UK and then selling the goods online without paying VAT. This is aimed at directly combatting tax breaks currently enjoyed by international etailers. In other notable news for the sector, Sainsbury’s has revealed its first quarterly sales growth in more than two years. The grocer’s LFLs, including online, rose 0.1% in the nine weeks to March 12. Total sales were lifted by a 14% rise in online grocery sales, 10% rise in sales of clothing and 11% lift in sales of entertainment products. The supermarket chain has also made an increased formal £1.4bn bid for Argos owner Home Retail Group. This move came shortly after a rival suitor, Steinhoff International, withdrew from the race.Read JLL UK's full response to the 2016 Budget here.
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