The issue of business rates appeared in the media again this week, as top UK retailers shared an open letter to Sajid Javid asking him to freeze increases in the property-based tax.
In contrast, research from law firm RPC showed retailers that only trade online reported a 31 per cent increase in sales this year, rising to £3.4bn in the year to 30 June up from £2.7bn the previous year. However, whilst pure online retailers aren’t betting on the high street for growth - we've seen Boohoo only acquire the online arms of Karen Millen and Coast this week - physical stores do remain an important touchpoint for customers. Why? Many people use a combination of online and offline in their decision to buy.
James Lowman, chief executive of the Association of Convenience Stores, says the business rate system is damaging the high street because the system is stopping local businesses from diversifying and innovating.
And in order for these stores to even try to compete with online giants such as Amazon, they need to be able to cater for the modern consumer and adapt their offering accordingly.
Innovation is the best means of growth in a volatile industry where competitors are nipping at established players' heels and winning the loyalty of their customers.
For example, VF, the parent company of Timberland and Vans opened a new Axtell Soho retail space recently which puts technology at the centre. The space highlights how tech can inform product development and customer experiences. It features avatar-based virtual mannequins that can showcase different looks in 3D and users can visualise the products in different scenarios. Digital displays allow brands to show more products with less space and provide an experience that caters to the shopper's desire to see items in different contexts.
Ultimately, business rates cannot be a blocker to diversification and innovation in retail. For consumers there is still a role for stores to play in the buying process and changes need to be made to ensure innovation is not stifled in a key UK sector.
More than 50 British retailers, including some of the biggest names in the industry, on Tuesday urged the government to “fix the broken business rates system”.