According to the Retail Bulletin, thousands of small retailers are announcing they are joining the British Retail Consortium’s campaign to end a historic rents practice that is imposing severe cash flow pressures. Nine trade associations, including the Association of Charity Shops have come out in support of the BRC’s high profile call for landlords to give up demanding shop rents three months in advance. In an archaic practice dating back centuries, most commercial rents are paid four times a year on, so called, quarter days. The next is Midsummer Day, 24 June.
The BRC is asking landlords to pledge to accept rents monthly in advance. Paying quarterly up-front costs retailers an extra £145 million a year. The move has already been publicly backed by major retailers including John Lewis, Next and Dreams. The BRC is developing a Standard to publicly recognise landlords who demonstrate flexibility. It has condemned the landlords’ body the British Property Federation, for advising its members not to co-operate with retailers who request monthly rental terms.
Director General of the British Retail Consortium Kevin Hawkins said: “Smaller retailers are coming out in force to demonstrate this antiquated and unsustainable rents practice is hitting retail businesses of all sizes.”At a time when they are being squeezed by rents, rates, service charges and utility bills rising well above inflation and shop prices that are actually falling, this costly, centuries-old, practice takes some justifying.
“Over the last two years a number of national names have gone to the wall but thousands of smaller retailers have folded too. Monthly payments would help struggling small retailers in particular by easing cash-flow pressures. By agreeing to a fairer rents regime, landlords will be contributing to the retail prosperity on which they also depend.” Managing Director of the British Hardware Federation Alan Hawkins, said: “BHF Group is right behind this important initiative. Paying three months rent up-front creates real cash-flow difficulties for our businesses, particularly smaller ones. Imagine being paid weekly or monthly but having to pay three months of your mortgage in one go.
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