September 21 2014 Latest news:
Wednesday, November 14, 2012
Norwich is the region’s retail capital - but are business rates killing trade? ROSA MCMAHON investigates.
It is no secret the economic climate for both consumers and retailers is difficult and often unforgiving.
Despite having just come out of the longest double-dip recession since the 1950s, the percentage of empty shops in the UK is still at 14pc, with more and more national stores going into administration.
In Norwich the numbers are more promising, with empty shops in the city decreasing from 9.2pc in 2009-2010, to 7.8pc today.
Much of the city centre is still bustling with activity and vibrancy, while the contrasting quarters of the independent Lanes, and Chapelfield and Gentleman’s Walk, make it unique.
But news of the closure of two coffee shops, the Caleys Cocoa Shop in White Lion Street and the nine-month-old coffee shop Union Yard on St Stephens Street, has raised further questions over how other small, independent shops are faring, what is being done to help them stay afloat, and how, ultimately, they are having to help themselves.
Both businesses blamed high rents and business rates for their demise and have urged landlords and policymakers to do more to help ease the burden.
But with business rates set nationally and the government looking at freezing rates at their existing levels until 2017, there appears to be little that can be done locally to help.
Much of Norwich’s independent areas of the city are based around the Norwich Lanes, housing shops and businesses set up and run by local people.
Steven Winter, 31, owner of Union Yard blamed the rise in business rates in combination with a rental lease which would tie him in for another three years to the shop.
Mr Winter said: “It’s unbelievable that you pay so much and the business rates keep going up.”
Union Yard employed local staff and used local produce, and Mr Winter added: “We wanted a few of these coffee shops, and could have employed five or six people in each shop: now we have to lose jobs.
“We get everything from the county while national chains get it all shipped in.”
The rising rates have been cited by local establishments for stunting their growth.
And last week MPs supported plans by communities secretary Eric Pickles to delay a revision of business rates until 2017, which would mean small shops having the measure for their rates set at 2008 levels, which was close to the peak of the market and property boom.
A revaluation of the rates from the 2008 levels would likely result in a sharp changes to business rates bills.
Ella Williams, 33, co-owner of Frank’s Bar on Bedford Street in the Norwich Lanes, described the current climate as “very difficult”.
“This is the first year that we have really noticed a difference in our general economy, and being an independent does make you very vulnerable”.
She added: “People are still coming in to us, but there is less spending per head. Norwich Lanes are very supportive, and if they weren’t in place, the area would be a completely different city. And people really do care about the city, and the small businesses care about what’s going on.”
But she does think the city council should be looking at the business rates, and getting involved with businesses.
She said: “They should have more of a connection in the area, and more of a presence. The Norwich Lanes is a community of businesses but we do feel the council are very separate from that.”
Paul Dodd, co-owner of Elements on Lower Goat Lane, who has been in the Norwich Lanes for 16 years, also said the council should be looking for ways to help the Lanes area.
The city council does advocate ways in which small businesses can get help in the city, with a section of their website outlining support avenues.
Alan Waters, deputy leader of Norwich City Council, said: “It’s always sad when a local business goes.”
He added: “There are ways in which people can seek or get some relief from business rates.”
He also said that the council did invest to support businesses.
The government is currently reviewing how business rates are distributed, with potential plans which would see councils keep what they collect, rather than the current system where the money is pooled centrally and redistributed.
As some companies say they are struggling to stay on the high street, independent retailers are finding the cyber sphere to be a more profitable outlet.
Many shops have reported significant increases to the online side of their businesses.
Nationally, Argos has decided to close 75 stores, with an explicit push planned for online buying.
Caroline Williams, chief executive of the Norfolk Chamber of Commerce, said that all retailers were suffering, but that it was “great” that Norwich had so many independents.
However, she said the smaller retailers did not have that financial support of the “big boys”, adding: “When it gets tough, it affects the independents immediately.”
She said that national businesses are finding ways to improve their customer service, which she believes puts a strain on independents.
She stressed independent shops are very valuable in Norwich, but while it is challenging for them, they need to learn to explore new avenues using technology and social media.
But there are green shoots to be found among the local shops, despite the rising rates. With news that we may be out of the recession, potential changes to business rates and the passion that small businesses in the city have for the places where they trade, the drive to keep the city’s independent area thriving continues.
Phones 4u is to go into administration - placing more than 5,500 jobs at risk - after network operator EE joined Vodafone in cutting ties with the retailer.