There are no doubts many businesses across the UK who will hope the Government delays its highly unpopular 2.5% VAT increase on December 31st.
The British Retail Consortium (BRC) has made a robust stance in calling for a delay to this Value Added Tax increase. The BRC has reinforced the nationwide plea by many UK retailers not to raise the current 15 per cent to 17.5 per cent VAT at the end of the year, given it is the busiest and lucrative time annually for the high street, and could potentially damage thousands of businesses within the sector.
A report released by the BRC in May announced that the VAT cut to 15 per cent during 2008 cost the retail industry a staggering £90m to action, and when (as currently planned) the increase goes ahead in December, is likely to cost retailers the same again.
For some unknown reason the BRC are only requesting that the deadline be put back one month, but more significantly they want an instant freeze on all new business rate burdens and the reinstatement of empty property rate relief, as the many empty retail shop units in most high streets are a detriment to all retailers, looking to attract footfall.
“Changing VAT rates back to 17.5 per cent at the end of December will soak up a lot of effort at the busiest and most important time of the year for most retailers,” say Stephen Robertson, the Director General of the BRC. “For some shops post-Christmas sales were 50 per cent above normal, so it’s a time when staff should be focusing on serving customers. Re-pricing is very labour intensive and the need for overtime and bank holiday employees will make it a costly distraction for retailers. The Government should postpone the reintroduction of the 17.5 per cent VAT rate by at least a month.”
The VAT increase, combined with planned business rate rises and other rising costs, is likely to lead to further job losses. The retail sector has been the backbone of our economy for decades; providing one in nine UK jobs, so surely the Government needs to quickly recognise this and sustain the foundations and heritage that are now under serious threat of collapse.
Hazlemere Windows are one of thousands of businesses in the UK who could be affected by the increase. Paying the 17.5 per VAT wouldn’t just equate to a surge in their business rates, but could potentially lose us business. We provide windows, doors and conservatories to both the domestic and commercial customers, and are conscious the increase in VAT to 17.5% from 1st January 2010 could deter people from ordering in early 2010.
Mark Austin, Marketing Director, Hazlemere Window Company Ltd
“Whilst most businesses can claim most of VAT back, sadly the vast majority of Hazlemere Windows, Doors & Conservatories retail customers can not,” says Mark Austin, Marketing Director at Hazlemere. “Therefore any tax increase is clearly not an incentive to purchase retail goods to help stimulate the British economy.
Hazlemere Window Company supports the BRC’s initiative to delay the implementation of the VAT tax increase by a month, and would much prefer no increase until the retail economy was in a healthier position.”
CATAGORY|Commerce, Retail
BMW today laid off 850 “temporary workers” at it’s Mini factory in Cowley, Oxford today with only one hours notice. Some of the staff had been working their over 5 years. Current employment legislation entitles employers to sack temporary workers without notice or any redundancy pay, which is what BMW did to 850 of there staff today, not ideal PR for the company or indeed the Mini or BMW brands.
Apparently, sales of the Mini in the UK were down 35% in January, so BMW decided to act without any consultation with the Unions or their workforce. Whilst these job loses at a major employer just down the road might be financially justified, the manner of the annoucement and treatment of the 850 ”temporary workers” is not. It is good that none of the permanent BMW Mini workforce are being made redundant – yet! All car manufacturers BMW seem to have done is create a Mini crisis!
CATAGORY|Commerce
According to the BBC’s Business Editor Robert Peston (who broke the story on Northern Rock), UK banks could end up lending us more than they did during the boom times. On the face of it this seems crazy, but if you read Robert Peston’s blog dated 4th January 2009, he gives good eceonomic reasons why this may become a necessity, as well as a reality, in 2009.
A taxpayers insurance scheme for banks, according to Robert Peston’s article on the BBC News website on 4th Jamuary is under serious consideration. His article asks “Why would this encourage banks to lend more than they are doing at present?” and then goes on to give the two following very good reasons:
“First, the banks could take a bit more risk when lending, because the loss to them in the unlikely case that all the stinky stuff hit the fan at the same time would be knowable and manageable.” and
“Second, with the state sharing the risk, the banks’ capital ratios would look much healthier as their balance sheets expanded, because the formal regulatory risk-weighting of lending would be significantly reduced.”
Global financial markets all appear to be looking to shore up their home front, and therefore UK Banks are more likely to re-direct any loans they are prepared to make to the UK market where their money is going to be safest. It looks us British taxpayers who are going to guarantee the banks money, to give them enough confidence to lend us money to help regenerate the UK economy! Ironic huh!
CATAGORY|Commerce
It started with Woolworths, then MFI, then Zavvi, the Officers Club, Whittards of Chelsea, Adams and now, according to BBC News, the French women’s clothing store chain Morgan has gone into administration.
With the income of many High Street retailers shrinking, combined with massively reduced margins caused by rising costs and heavy discounting, it is clear many retailers simply will not be able to cover all their outgoings, particularly in terms of rental and staff costs. Many retailers are tied into long term leases that they may be unable to get out of without going into administration.
2009 will no doubt be a testing time for retailers, wholesalers and manufacturers who have high fixed overheads. Through prudent management and decades of successful trading, Hazlemere Window Company Ltd. is in the fortunate position of not only owning the freehold of its Head Office, Factory and Showroom, but having its entire manufacturing site at Cressex Business Park, High Wycombe, unencumbered.
This strong foundation, along with its largest ever order book going into 2009, is very comforting news to the staff and the thousands of Hazlemere Windows customers. The company’s positive balance sheet also enables it to negotiate the best possible deal on high grade raw material and with all its suppliers, so despite the challenging trading environment in the UK at present, the Hazlemere Group is more than well placed to weather the difficult economic times ahead.
CATAGORY|Commerce, Retail
Today marks the start of the closure of Woolworths’ 800 High Street retail stores in batches. More than 200 Woolworths stores to close later today.
Locally the Woolworths in Aylesbury, Maidenhead and Uxbridge close today, Amersham and Windsor Woolworths’ close down on 30th December 2008, Slough and Watford on 2nd January and the Woolworths’ stores in Beaconsfield, Bracknell, High Wycombe, Reading and Thame close in the final batch of closures of Woolworths high street retail stores on Monday 5th January 2009.
Unless a last minute buyer is found over 27,000 jobs will go by Monday 5th January, not the greatest start to the New Year. However my concern is that just like Northern Rock was the tip of the iceberg for the banking industry, is Woolworths simply the start of our High Streets changing forever? Since Woolworths announced £385m worth of unsustainable debt, MFI and Zavvi (formerly Virgin Megastores) have gone into administration, with another 15-25 chains under threat. When will we learn that you can not build a successful business on debt? Something that is coming home to roost big time in not just the UK but the Western World.
Today is an extremely sad day for all the employees in Woolworths retail chain, but also for the entire retail industry, as I fear it will lead to the reshaping of the High Street in this country, and possibly affect how, when and where we shop in the future. When the banking crisis at Northern Rock became apparent, not even the City was expecting the Worldwide implosion of the banking system requiring governments across the globe to step in to prevent financial meltdown. It would not be prudent for the UK government to step in, as the management failures of Woolworths are now evident for all to see. The difference between Northern Rock and Woolworths is that we now probably expect a collapse in the High Street? Deflation here we come?
CATAGORY|Commerce, Retail
With both MFI and Woolworth’s in administration, British retailing looks bleak, especially with others like Currys, PC World and Dixons saying profits are down. MFI seemed to lose their way several years ago when they tried to move up market away from their original marketplace, and instead of being able to buy goods and take them home you now have to order them and wait – No wonder IKEA have done so well as they have filled the void MFI for some unknown reason appeared to have vacated.
Unlike MFI, Woolworth’s is a High Street brand that would be very sad if it closed. Woolworths have 3 retail outlets local to Hazlemere Windows in Amersham, Beaconsfield and High Wycombe. Woolworths have been in the High Street in High Wycombe since 1969, and a major employer in the town, so it would be a blow if they do not come out of administration. There is an article about the current plight of Woolworth’s High Wycombe Superstore on the Bucks Free Press website by Business Journalist, Neil Phillips.
Retail outlets simply can not sustain their outgoings with rising utlilty charges, labour costs and “greedy” landlords wanting rent increases. If landlords want to insure against empty High Streets they will have to re-adjust their expectations, as even existing leases and covenants will be worthless if the businesses go into liquidation. Lets hope Worthworths is not the thin end of the wedge as Northern Rock was to the banking sector!
CATAGORY|Commerce, Retail
Hazlemere Commercial, a major Division of the Hazlemere Group recently secured a major £2.2m order for aluminium windows, doors and curtain walling at Bideford College in Devon. The contract will be delivered by Hazlemere Commercial in 2009 as part of a £44m redevelopment of the existing college campus by developers Morgan Ashurst, as part of the Governments Building Schools for the Future programme.
This is just one of dozens of sizeable contracts won in recent years by Hazlemere Commercial, who have a growing reputation amongst developers, local authorities, housing associations, architects and commercial property owners. Hazlemere Commercial’s specialist technical knowledge and unique capabilities is what sets them apart from run of the mill double glazing firms, as many of the case studies that have been done on past Commercial projects proves. Hazlemere Commercial’s “secret” is building excellent long term relationships with clients offering excellent customer service long after installation, but also preventative maintenance, saving clients future major problems by assisting with day to day repairs and restoration.
CATAGORY|Commerce, Windows & Doors
What on earth is Shadow Chancellor George Osborne up to in an article in the Times today suggesting that there could be a run on the Pound? He “accuses” Gordon Brown of being irresponsible with the British Economy, yet irresponsibly suggests “We are in danger…..of having……a run on the pound.” Is he trying to bring Sterling to its knees? Does he want the Tories to inherit a failing economy? The Tories would do well to bring back the Statesmanlike and respected Kenneth Clarke, who focuses on policies and not personalities like Mr Osborne. Could it be Mr Osborne’s own lack of policies and personality he is covering up for by criticising everyone Else’s?
CATAGORY|Commerce, UK Politics
