ChatterBank1 min ago
Amazon And 'the Death Of The High Street'.
32 Answers
There has been much hysteria in the media lately about the 'death of the High Street', and the blame seems to be laid entirely at the door of Amazon.
The media seems to be on a crusade against the on-line company because it feels that Amazon is sucking the life-blood out of personal retailing, and is also guilty of not paying anything like enough income tax, merely adding insult to injury.
My view is this - the 'death of the High Street' is rooted in the same social changes as the 'death of the pub' - people's shopping habits are changing, and Amazon, quite rightly, enjoys the increased income from those changes. But the fact is, it is consumers who are 'killing the High Street' because they shop on line, not Amazon - that is clearly putting the car before the horse.
As to Amazon's tax arrangements, which are highlighted by the media foaming at the mouth - Amazon is a business and its responsibility to its shareholders and it is beholden to maximise profit opportunities. If that includes taking advantage of lax tax regulations, then the fault for that lies squarely with the Inland Revenue, which should address the gaps that Amazon and others exploit perfectly legally.
The media seems to think that Amazon is breaking some sort of moral code that protects High Street businesses because they are a tradition. That is not how culture and society evolve - if they did, you would still see tailors sitting cross-legged in shop windows sewing away.
Time moves on.
What do others think?
The media seems to be on a crusade against the on-line company because it feels that Amazon is sucking the life-blood out of personal retailing, and is also guilty of not paying anything like enough income tax, merely adding insult to injury.
My view is this - the 'death of the High Street' is rooted in the same social changes as the 'death of the pub' - people's shopping habits are changing, and Amazon, quite rightly, enjoys the increased income from those changes. But the fact is, it is consumers who are 'killing the High Street' because they shop on line, not Amazon - that is clearly putting the car before the horse.
As to Amazon's tax arrangements, which are highlighted by the media foaming at the mouth - Amazon is a business and its responsibility to its shareholders and it is beholden to maximise profit opportunities. If that includes taking advantage of lax tax regulations, then the fault for that lies squarely with the Inland Revenue, which should address the gaps that Amazon and others exploit perfectly legally.
The media seems to think that Amazon is breaking some sort of moral code that protects High Street businesses because they are a tradition. That is not how culture and society evolve - if they did, you would still see tailors sitting cross-legged in shop windows sewing away.
Time moves on.
What do others think?
Answers
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It’s interesting that pubs have been drawn into the conversation. The pub trade generally most certainly is in crisis. In 2017 they were closing at the rate of about eighteen a week:
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The main reason cited is the tax burden placed on them compared to supermarkets. (I happen to believe there are other reasons at play, but that’s beside the point here). However, as has been pointed out, that does not apply to the entire sector. The investments being made by the Pubcos are concentrated on their establishments in larger towns and cities. Pubs in those locations have been somewhat insulated from the problems faced by pubs in less busy areas because the owners enjoy decent custom for about fifteen hours each and every day. Pubs in quieter locations are lucky to have customers in any number for about five hours. Ironically most of the pubs in towns and cities gain a lot of their custom from High Street footfall. It may not be long, however, before some of them feel the pinch from people deserting the High Street. As a taster, Wetherspoon’s, whose business model relies mainly on such footfall, sold 23 pubs in the last financial year.
Kavlidir has enumerated very well the financial burdens of running a small shop. For many it is simply unsustainable. Apart from business rates, many high street properties are owned and rented by the local council. Unlike commercial landlords who have to adopt a pragmatic approach to their business, local authority landlords don’t particularly care whether their properties are empty or not. They have a “set rent” which must be paid regardless whereas a commercial landlord would do a deal with his tenant to help keep him in business, preferring instead to have a proportion of the rent rather than no rent at all.
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The main reason cited is the tax burden placed on them compared to supermarkets. (I happen to believe there are other reasons at play, but that’s beside the point here). However, as has been pointed out, that does not apply to the entire sector. The investments being made by the Pubcos are concentrated on their establishments in larger towns and cities. Pubs in those locations have been somewhat insulated from the problems faced by pubs in less busy areas because the owners enjoy decent custom for about fifteen hours each and every day. Pubs in quieter locations are lucky to have customers in any number for about five hours. Ironically most of the pubs in towns and cities gain a lot of their custom from High Street footfall. It may not be long, however, before some of them feel the pinch from people deserting the High Street. As a taster, Wetherspoon’s, whose business model relies mainly on such footfall, sold 23 pubs in the last financial year.
Kavlidir has enumerated very well the financial burdens of running a small shop. For many it is simply unsustainable. Apart from business rates, many high street properties are owned and rented by the local council. Unlike commercial landlords who have to adopt a pragmatic approach to their business, local authority landlords don’t particularly care whether their properties are empty or not. They have a “set rent” which must be paid regardless whereas a commercial landlord would do a deal with his tenant to help keep him in business, preferring instead to have a proportion of the rent rather than no rent at all.
I agree with that, woofgang. When I first started driving I thought nothing of stopping off for a couple of pints on my way home and getting back in the car, now I wouldn't dream of it.
Many men from a previous generation used to leave their wives and kids at home several nights a week and maybe Sunday lunchtimes while they had a drink or three with their mates. If their wives were lucky they'd get taken to the pub on a Friday or Saturday night whilst granny babysat.
Those days are gone
Many men from a previous generation used to leave their wives and kids at home several nights a week and maybe Sunday lunchtimes while they had a drink or three with their mates. If their wives were lucky they'd get taken to the pub on a Friday or Saturday night whilst granny babysat.
Those days are gone
Amazon's operating profit in 2017 trebled but its tax liability went down by 38 percent.
Clearly anyone or any business would be foolish if not taking full advantage of the tax regime.
However, a company the size of Amazon is better placed to pay for advice as how best to structure their business so as to gain an advantage.
That advice will not be cheap and it may be that the price of that advice and the setting up of schemes to reduce tax liabilities is not within the reach of (or may not be available to) many High Street businesses.
Clearly anyone or any business would be foolish if not taking full advantage of the tax regime.
However, a company the size of Amazon is better placed to pay for advice as how best to structure their business so as to gain an advantage.
That advice will not be cheap and it may be that the price of that advice and the setting up of schemes to reduce tax liabilities is not within the reach of (or may not be available to) many High Street businesses.
The government would be foolish to encourage Amazon to leave the UK.
"Amazon currently employs 24,000 staff in the UK, and has invested £6.4 billion in the country since 2010 on research and development, head office functions and fulfilment and logistics infrastructure."
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"Amazon currently employs 24,000 staff in the UK, and has invested £6.4 billion in the country since 2010 on research and development, head office functions and fulfilment and logistics infrastructure."
https:/
The short-sightedness of many Local Authorities in allowing out-of-town shopping parks to be developed played a great part in the decline of the High Street. It is so much more convenient to drive to a single destination where there is a range of retail outlets catering for most needs than wander round a town centre.
Many LAs also discouraged the formation of new residental units in town centres; once flats above shops had become additional stock storage areas, they were refused permission to change back. This helped account for the empty, vulnerable street scenes during the hours of darkness.
The 'up-side' of this is that there are now many premises that with a bit of skillful development could certainly be utilised to ease the housing situation and to breathe life back into dying commercial areas.
Many LAs also discouraged the formation of new residental units in town centres; once flats above shops had become additional stock storage areas, they were refused permission to change back. This helped account for the empty, vulnerable street scenes during the hours of darkness.
The 'up-side' of this is that there are now many premises that with a bit of skillful development could certainly be utilised to ease the housing situation and to breathe life back into dying commercial areas.
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