An antiquated rents system adds £145m a year to retailers’ costs, it has been claimed.
The British Retail Consortium (BRC) says that the tradition of charging quarterly for rents on commercial property ‘cannot be justified in the modern business world’.
The organisation is advising retailers to boycott new leases that demand rents quarterly in advance and says monthly payments are now becoming more common.
“It's a year since the BRC first called on landlords to switch to accepting rents monthly in advance and monthly payments are increasingly becoming the norm on new leases,” said Paul Browne, BRC’s head of property.
Browne said that it was often smaller landlords that were more flexible but bolder retailers were making most progress in getting a fairer deal.
“The first three months of the year is a period when customers traditionally have less to spend, sales are usually driven by discounting and some retailers do not make an operating profit,” Browne continued.
“This year interest rate rises and mounting household bills are undermining consumer confidence further. For many the last thing they need this month is a massive up-front rents bill.
“There has been a real mood change among many commercial landlords. They know that ultimately this long overdue reform will come. Now is the time for retailers to be forceful and call time on this ancient and costly practice.”
© Crimson Business Ltd. 2007
