Retailers give the government some love

British retailers have u-turned and decided they quite like the coalition.

by Rachel Savage
Last Updated: 10 Feb 2014

Britain’s top retailers have decided they actually like all this coalition malarkey after all, with over three-quarters of chairmen giving the government their seal of approval compared to overwhelmingly negative views just a year ago.

The government may be celebrating with some retail therapy after floundering over flooding, as 76% of chairmen said they thought it was ‘doing well’ or ‘reasonably well’, according to headhunter Korn Ferry’s fourth annual survey of chairmen. It was an abrupt about-turn from the retailers after last year, when two-thirds of chairmen said they felt indifferent or negative about the coalition.

Headhunter Korn Ferry interviewed 33 chairmen for their fourth annual survey, 73% of whom said they were optimistic about the economy, up from just 15% last year. Only 3% were pessimistic, compared to half last year. The chairmen head up 39 companies, which make up 44% of all retail sales and include the 10 largest retailers.

‘They were right to hold the line on austerity and public finances. They were right to encourage liquidity measures,’ said John Lewis Partnership chairman Sir Charlie Mayfield, adding that the economy now needed a ‘steady hand on the tiller’.

However, he added a note of caution, saying that a ‘long-term plan for growth’ is ‘still very much needed’.

‘They’ve done exceptionally well in difficult circumstances. They’ve stuck to their knitting and it seems to be working,’ said Debenhams chairman Nigel Northridge, conjuring up images of clicking needles in the House of Commons.

Most of the chairmen continued to push for further reform of business rates, whose rise was capped in the Autumn Statement after the survey took place, although they displayed a bit of self-awareness on that front.

‘Of course we’d like to pay less, but it behoves us all to think very carefully before pursuing self-serving fiscal change,’ said one chairman, who wasn’t named in the report.

As retail chairmen cheer up, the British high street is looking a bit less sad and empty too. The average shop vacancy rate fell below 14% in December for the first time in four years, compared to a peak of 14.6% in 2012, the Local Data Company said.

However, regional variations are still pretty wide, with vacancy rates rising in the north west, north east and east of England in the last year. High streets in the north west are the emptiest, at 17% the vacancy rate is double that of London.

Sir Ian Gibson, chairman of Morrisons, which grew from the north of England, also warned about a regional divide. ‘We have become a two-and-a-half-tier economy – inner London, greater South-East and the rest of the UK,’ he said. ‘Step outside that and you don’t see signs of renewed economic activity.’

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