Business, Innovation and Skills CommitteeWritten evidence submitted by New West End Company
New West End Company
1. New West End Company (NWEC) is the UK’s largest retail Business Improvement District. It represents over 600 retailers in London’s West End including those on the three main shopping streets (Oxford Street, Regent Street and Bond Street) and many surrounding streets.
2. Over 200 million visits are made to the West End every year, generating in excess of £7.5 billion and employing more than 100,000 people.
3. NWEC works with public and private sector partners to ensure that the West End is welcoming, clean and secure. It promotes physical improvements to the District (such as the new Oxford Circus crossing) and markets the district worldwide.
4. In December 2012 NWEC won its third ballot of retailers which gave it a new five year mandate.
Scope of our Evidence
5. Our evidence relates to the local element of the Government’s Retail Strategy Sector Document and other matters raised in the Committee’s call for evidence, in particular the implementation of the Portas Review and the impact of online and direct sales on retail.
6. The two areas we wish to raise with the committee are the future development of BIDs and the need to ensure that retail districts are able to respond effectively to new forms of retailing.
The Future Development of BIDs
7. BIDs have been a great success in supporting retail districts. The BID levy provides significant resources for local improvements and attracts additional funding. The active involvement of senior retailers on the BID board provides invaluable private sector expertise and experience. And the role of BIDs as local delivery agents provides additional services that are essential for local retailers.
8. Currently BIDs represent occupiers. NWEC has been fortunate that some of its major property owners have, from the very start, recognised the value of BIDs to an area. They have voluntarily provided additional funding and participated at board level to contribute to the wellbeing of the West End. However, NWEC and others have been arguing for formal property owner inclusion in BIDs so that, subject to a successful ballot result, all eligible property owners would contribute.
9. The Government’s Retail Sector Strategy Document recognises the central role of BIDs in supporting retail. The Portas Review recommends property owner inclusion in BIDs and urges the government to legislate.
10. The previous government accepted an amendment to its Business Rate Supplements Bill (subsequently the Business Rates Supplements Act 2009) to allow for property led BIDs in specific circumstances (in an area where a Business Rate Supplement is in place and where there is an existing BID). This was supported by all parties.
11. However, in order to implement this policy there needs to be secondary legislation to provide the detailed regulation for ballots and operation. To date, nearly four years after the legislation received Royal Assent, these regulations have still not been produced. This is despite proposals being put forward that have the agreement of ourselves, British BIDs, The British Property Federation and major property owners.
12. Property inclusion would bring additional private sector funding into eligible BID areas at a time when the government is looking for more private sector investment. For NWEC this delay is causing financial problems as property owners are gradually withdrawing their voluntary contributions.
Recommendation—The Select Committee should recommend that the government prioritises the implementation of the Property Bid section of the 2009 Business Rate Supplements Act.
Responding Effectively to New Forms of Retailing
13. Traditional retailing faces competition from new forms of retailing, whether the growth of out of town shopping, new large shopping malls or internet shopping. In addition, the West End operates at an international level and constantly needs to compete with new competition in regions such as the Middle East and the Far East.
14. Individual retailers have responded to the growth of internet shopping. Many have embraced it as an additional medium for attracting customers, both through direct selling or as an online showroom to encourage shoppers to their stores.
15. Our evidence relates to how traditional retail areas should respond to the rise of new forms of retailing. NWEC believes that there are two areas for the committee to examine.
16. First, there is the continual rise in customer expectation, driven by new shopping experiences and venues, the internet and more global travel. The public and private sector needs to appreciate and respond to meet new demands. Shopping needs to be seen as a broader leisure experience. We have to continue to attract the top shops and leisure businesses, create high quality public realm and provide supporting facilities that make it a pleasure to shop with more places to relax, eat and drink, and more surprises, more welcomes, more security and more cleanliness.
17. Events are a key part of that experience. NWEC’s VIP (Very Important Pedestrians) Days which provide traffic free shopping in the West End during one weekend before Christmas, attract one million shoppers and result in up to £30 millions of additional retail spending in that weekend.
18. The policy implication of this is that local authorities, as well as the private sector, need to ensure that those essential services for retailers, such as policing and street cleaning, are not diminished at a time of reductions in local government finance. We understand that the Select Committee is not examining Business Rates, but retailers feel that the large amounts they pay for this tax is not always reflected in the level of services they receive.
19. BIDs are legally constituted delivery agencies. We believe that our role as partners to local government can be further extended and exploited by local authorities to ensure that retail district continue to receive the level of essential services they need. Cleansing and enforcement of street activities are good examples of areas where BIDs could play a greater role in delivering these essential services.
Recommendation—The Select Committee should recognize the importance to retailing of creating a welcoming, safe, clean and exciting shopping environment and encourage local authorities to work more closely with BIDs and others to find innovative ways to deliver essential services
20. Secondly, shopping districts need to explore how the emerging digital world can be harnessed to enhance the shopping experience. This should be done in two ways, first by embracing digital to enhance experience and secondly by ensuring a level playing field.
21. In the first instance new apps, for example, can be used for navigation, browsing, reputation management and local direct marketing to visitors. Some Universities are exploring the wider use of digital technology to support retailing. The internet, in its widest sense, should not be seen as competition to traditional retailing but as an additional tool to enhance the shopping experience.
22. In the second case, it is important to ensure that retailers can compete with 24/7 internet retailing. While we appreciate that the Committee does not wish to examine Sunday trading, research undertaken by NWEC during the extended hours introduced by the government during the Olympic and Paralympics games showed that longer opening had a very positive impact on retailing with little determent to smaller stores or employees.
Recommendation—BIS should be encouraged to work with major retail districts and universities to trial a range of innovative uses of digitalization to enhance retailing both locally and internationally.
Recommendation—The government should be encouraged to examine various options for extended Sunday trading hours.
Conclusion
23. NWEC welcomes the Select Committees inquiry into the Retail Sector and its recognition of the importance of retailing to the UK’s economy both locally and internationally.
24. NWEC would be happy to expand orally on the issues raise if required.
16 April 2013