Frasers Group boss Michael Murray has called for urgent reform of business rates, which he claims are now equal to the amount retailers spend on rents.
Murray said that retailers used to plan for rates to be around half the rent they pay on properties but they are now around the same level.
“It makes it almost unviable. You’re almost paying rent twice,” he told lifestyle magazine, The Gentleman’s Journal podcast.
“Historically, when there was no online, rents were a lot higher and rates were benchmarked at broadly 50% of the rent you were paying. Now rents have come down so much because online is eating away at the retail sales.”
Murray claimed that the business rates system was “built for retail with no online”.
“It needs to be reformed to encourage retail investment. I know they [the government] have to balance the books as well, they could do it a lot faster.”
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Murray is the latest retailer to take aim at the business rates system.
Earlier this month the chief executives of 44 of the UK’s biggest retailers, including Aldi, Boots, Ikea, M&S, Sainsbury’s and Tesco, wrote to chancellor Jeremy Hunt calling for a freeze in business rates in the upcoming autumn statement.
Frasers acquisition strategy
Murray also gave an explanation into Frasers Group’s acquisition strategy. The retail group owns stakes in many disparate businesses including AO, Boohoo, Currys, Asos, Hugo Boss and Mulberry.
He said the business is keen to work with the world’s best brands and having a stake in the businesses helps enable the group to do that.
“If you say you want a meeting with somebody, nine times out of ten nothing usually comes from it. But if you’ve got skin in the game with a piece of the action things happen much quicker.”
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