Budget changes to business rates do not go far enough, warns Argos boss
Chief executive John Rogers said “full reform” is needed.
The boss of retailer Argos has criticised the Chancellor for failing to reform “not fit for purpose” business rates and said this week’s Budget changes were just “tinkering around the edges”.
John Rogers, chief executive of Sainsbury’s-owned Argos, told the Press Association the announcements made in Wednesday’s Budget did not go far enough, with the tax having seen thousands of retailers hit with sky-high rates increases this year.
He said he was “disappointed” Philip Hammond had only offered a small reprieve by bringing forward plans to switch the inflation measure for annual rate rises to the Consumer Prices Index and cutting the length of time between revaluations to three years.
Mr Rogers said: “There needs to be a full reform of business rates – a business tax that’s based on property ownership is not fit for purpose.”
He added: “Tinkering around the edges is just not sufficient.”
Mr Rogers said an overhauled rates tax system needed to take into account the fact businesses are now becoming so much more digital, with 60% of Argos’s sales made online.
Mr Hammond said the changes announced in the Budget would save businesses a total of £2.3 billion over five years.
But it dashed hopes for a rates freeze, while many experts said it would not be enough to support struggling businesses.
Firms across the country were left reeling following the controversial revaluation of business rates earlier this year, which accounted for property price changes over the last seven years.
The comments from Mr Rogers come as the chain is gearing up for Black Friday – now its biggest trading day of the year.
Argos is launching its Black Friday deals three hours earlier this year, at 9pm, after seeing “enormous” numbers of shoppers start hunting for bargains online the evening before last year’s event.
It saw around half a million visits per hour from 4pm onwards on the Thursday before Black Friday in 2016.
While the group kicked off its 14-day discount bonanza on November 15, it confirmed the best deals have been saved for Black Friday itself.
Mr Rogers said it will be more important than ever before for many shoppers this year, with consumers squeezed by low wage growth and soaring inflation and fearful of what is to come in Brexit negotiations.
He said: “It’s a challenging market, reflecting a tough consumer environment and uncertainty – whether due to Brexit, the Government or the inflation that’s coming through – and consumers want bargains.
“They want to shop in a savvy way.”
He said October had been particularly quiet for retailers, but the sector was hoping Black Friday would be a “trigger” for consumers to start spending again ahead of the Christmas season.
Argos owner Sainsbury’s recently revealed tougher trading in its general merchandise arm contributed to a sharp slowdown in sales growth to 0.6% over its second quarter, while half-year profits tumbled 9%.
The supermarket giant, which bought Argos owner Home Retail Group for £1.4 billion last year, warned at the time of a “challenging” general merchandise market, but said it hoped Argos would give it the edge in a tough market.
It has already added 112 Argos stores within supermarkets, with another 53 due to open by Christmas, while rolling out click and collect nationwide for the chain.