Frasers Group chief executive Michael Murray has warned that rising business rates are discouraging retailers from investing in high street stores.
Murray said retailers were effectively being penalised for refurbishing and improving their physical estates, as the investment could result in higher tax bills.
Speaking to The Telegraph during the opening of a new Sports Direct store in Dublin, Murray said Frasers spends tens of millions of pounds upgrading its shops, only to see the properties’ business rates increase.
He described the situation as making “zero sense” and warned that mounting costs were making it increasingly difficult for retailers to operate profitably on the high street.
Murray pointed to increases in the national minimum wage and employers’ National Insurance contributions alongside the business rates burden as key pressures facing store-based retailers.
The government introduced a new business rates system in April, including lower multipliers for qualifying retail, hospitality and leisure properties with rateable values below £500,000. A higher multiplier applies to properties above the threshold.
The Frasers boss also criticised proposals to provide pubs and music venues with a 20% business rates discount while placing additional costs on large warehouses.
He argued that warehouses supplying physical shops should not be penalised in the same way as distribution centres operated by online-only businesses.
Retailers have previously warned that increasing taxes on large warehouses could add further costs to supermarkets, department stores and other businesses with extensive store and supply-chain networks.
Murray called for business rates on shops to be reduced to create a more level playing field between online pureplays and retailers investing in town centres.
Despite his concerns, Frasers Group is continuing to expand and upgrade its bricks-and-mortar estate, including its new Dublin Sports Direct location and its recently opened Manchester flagship.
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