Although two thirds of independents quizzed by The Grocer own their shops, rent increases are still having an impact on the rest.
“It's one thing after another at the moment what with increases in my electricity and gas bills too,” says one retailer in the Midlands. “My rent rise is just another thing on the never ending list of bills.”
This survey confirms the feelings expressed by retailers in Crawley who are protesting about rent increases proposed by Grays Jenkins, the surveyor hired by their landlord, Crawley Borough Council ('Independents face massive rent hikes', The Grocer, 1 July, p8). Some faced a previous rent review in 2001, but it fell through, so they fear they will now have to pay increases backdated over five years.
In our survey, nearly everyone is facing a rent increase of up to 50% and a very unlucky 6% are faced with their rent doubling in the coming months. More than one retailer is pondering whether it is worth continuing in business.
“I have thought about selling my shop over the last year more than at any other time I have had it,” says one retailer in the North East. “The trouble is, it's worth next to nowt compared to a few years ago.”
Others too were caught in this trap of not being able to retire out of the business because their shops were not worth as much as they had hoped for. “I need a decent amount if I'm going to be able to retire and so I just have to carry on and hope it gets better,” said a retailer in the South West.
At the same time, thousands of independent retailers are campaigning to scrap quarterly rent reviews and bring in a monthly system (Grocer 24/06/06). The British Retail Consortium (BRC) is leading the charge, claiming the practice of demanding shop rents three months in advance every quarter was putting too much pressure on retailers.
We asked retailers that rented their shops if they would prefer to pay their rent monthly rather than quarterly but interestingly, there is no huge majority in favour. Only 56% say they would prefer to pay monthly while just over 44% were happy with the current quarterly system.
“I can easily budget for the quarterly rent bill at the moment as it matches in with my utility and 'phone bills,” says a retailer in the North West. “I don't want the bill every month.”
The questions we asked:
1) Do you own or rent your shop?
Own - 68%
Rent - 32%
2) If renting, are you facing a rent increase or has it recently been increased?
Yes - 75%
No - 25%
3) Is this increase:
Up to 50%? - 94%
More than 50%? - 6%
4) Is your rent review overdue?
Yes - 20%
No - 80%
5) Should rent be paid monthly, rather than every three months, to spread payments?
Yes - 56%
No - 44%