London Retailers’ Plea For Lower Rents

New London Mayor, Boris Johnson, made the headlines last week when he announced developers should provide more affordable small shops. In a proposed new plan, major retail developments could be forced to include trading units with lower rents to cater for the needs of independent retailers.

Helen Sherman who owns London fine food store, Rosslyn Delicatessen, welcomed the announcement, saying, “It’s nice to see something might be done to help the independents. It’s very difficult for us at the moment. The multiples are really pushing the rents up – I pay almost double what I used to. If rents carry on increasing at this rate I don’t see any independent retailer surviving.”

She adds. “There is only so much you can ask your customers to pay to cover your costs. At some point they just won’t come anymore, so something has to be done.”

Natalie Salama-Levy, who runs Adafina, a Kosher delicatessen on Abbey Road, agrees that it would be nice if something could be done regarding rents. She says, “We are in an affluent area and, although we are a bit off the beaten track, we have to pay a hefty rent. In the current economic climate you wonder if landlords could do more, so it would be nice to see the Government or local authority acting.”

However, the BRC pointed out that the Mayor’s proposal might have a adverse effects. The consortium’s director general, Stephen Robertson, explains, “We support small shops; they are essential to the richness and diversity of London retailing, but the Mayor needs to think through all the implications of forcing any new obligation on developers. How do you define small independent retailers? Who meets the cost of subsidised rents? Will larger retailers on the site have to pay more, adding to their costs, driving up other rents in the area and ultimately pushing up prices for customers? What will be the competitive impact on existing retailers nearby who are not receiving rent subsidies?”

This last implications could prove the most troublesome ones, as shops receiving lower rents in new developments could be seen as benefiting from an unfair competitive advantage over other local stores. Ms Sherman as Rosslyn Delicatessen, worries, “If that happens, it could push me out of business. The help should go further, but it’s hard to think of a good solution as the issue is very complicated.”