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High street retailers rally to take on Amazon

High street retailers rally to take on Amazon

Monday 17 September 2018

High street retailers rally to take on Amazon


A pixels versus bricks-and-mortar showdown is brewing in Jersey, with local retailers big and small joining forces to strip Amazon of an “unfair” competitive edge allowing it to deliver lower prices.

Backed by the island’s largest business lobby group, the Chamber of Commerce, high street shop owners and Sandpiper are pushing for all goods bought online to include GST.

They say that the island’s current ‘de minimis’ exemption clause, which sees the 5% tax only imposed on imported goods over £240 and therefore allows online retailers to charge lower prices, is “flawed and unfair” and creates an “uneven playing field” for them at a time where town shops are emptying at an unprecedented rate.

Chamber of Commerce President last week hit out at the clause as “a one-way street that impacts our high street”, further describing it as a “5% boost” to off-island retailers by the States, which is not reciprocated when local goods get sent to the mainland.

Eliot_Lincoln.jpg

Pictured: Chamber of Commerce President, Eliot Lincoln.

Chamber’s official drive for “consistent” taxes to on and off-island retailers comes amid increasing calls from shop owners across the retail spectrum, spanning supermarkets, and tool, toy, music and jewellery sellers alike. 

Romerils’ Managing Director Steve Jewell explained in a letter to a panel of politicians tasked with reviewing the island’s retail economy that GST was harmful to local traders, who he said struggled with “disproportionately higher operating costs than UK businesses” and less buying power.

“So why government would want to layer in another advantage to off-island retailers does not make any sense,” he said.

He urged them to consider implementing one of three policy ideas: Jersey retailers only charging GST on sales over £240, scrapping the de minimis level and GST charge on all imports, or getting UK retailers to agree to charge, collect and pay the 5% GST to the States. He described the latter as the “least favourable since we do not believe that all UK retailers would be motivated to support this.”

Pictured: Romerils' Managing Director says the GST de minimis level is extremely harmful.

Owner of St. Helier’s only music retailer, Jonathan Scriven said he was in favour of a 5% GST implemented on all imported goods and collected by the Post Office.

Describing online sales as “the sole reason for the demise in retail”, the man behind Island Music told Express that the 5% GST was “prohibitive” and “almost a retail tax for small businesses.”

He said that businesses don’t want to lose sales by competing with the likes of Amazon, but can’t lower their prices any more for fear of not having enough money to over staff and running costs.

“I really try and support local retail,” he added. “I end up paying more, but I do it if I feel I support the island’s economy. If we don’t, the unemployment numbers will rise and tax rates will go up. The States could easily get a grip of it. Removing the GST limit would be a start. There really should be more done given the contribution we make to the economy.”

Jonathan Scriven Island Music Centre

Pictured: Jonathan Scriven, owner of Island Music, blames online sales for the demise in retail.

For John Testori of Bambola toy shops, the clause is the main reason why online shopping is such a threat to local retailers. He wrote: “The current legislation encourages people to shop online and avoid a purchase tax. In our own stores, less than 1% of our products would retail for over £240.”

The Jersey Retail Association voiced similar concerns.

Lorie Rault, Chief Executive, commented: “Amazon and other online UK businesses must be treated in the same way as any other brand entering the Jersey market. The Island must act now to implement a new de minimis level and GST collection system.

“The longer we delay, the more costly and complicated it will be to implement, and the more money the Island will lose.”

Lorie Rault

Pictured: Lorie Rault, Chief Executive, described the de minimis level at £240 as short-sighted.

But, as a move that would inevitably push up prices for islanders, removing de minimis wasn’t a comfortable idea for the Consumer Council.

Chairman Carl Walker said that other options should be looked at to revitalise the high street. He told Express: "We appreciate that the high street is struggling and needs help but we are not convinced that charging GST on all imports is the right thing to do.

"For example, for people buying small items for £2, the administrative costs and the process involved in claiming that GST is going to far outweigh any benefit. How much is it going to cost the taxpayer to recoup that 10p? If the objective is to make pricing more competitive, I am not sure it will work."

While Mr Walker admits that online sales are the high street’s biggest threat, he believes that sky-high rents and parking issues also play a part.

Carl_Walker Consumer Council

Pictured: The Consumer Council is concerned about the impact charging GST on every import will have on customers.

"I am sure that if rents were cheaper the high street will be full of shops. If we gave more flexibility and more time for people to shop, more of them would come into town. Even if they want cheaper goods, they will still buy locally for the reassurance they can take it back if something goes wrong, without having to worry about posting back,” he argued.

Finding a solution, he said, will involve a “joined-up approach” from everyone with an interest in retail – including consumers themselves.

"Everybody is coming up with different ideas but there Is no holistic approach to the problem. We need to pull together and find ideas. There are plenty of options we can look at before we start charging GST on every import. In our opinion, it is not the answer.”

While import GST might be the main bone of contention for many, others argue that the solution to Jersey’s high street woes lies in Sunday trading, which could be a draw for tourists.

closed

Pictured: Allowing shops to open on Sunday could also help revitalise retail.

Town Centre Manager Daphne East told Express: “I would like to see the opportunity to deregulate Sunday Trading, let the footfall approx. 10,000 do the talking. Sunday opening is also an opportunity to gain additional sales, we are all aware that the best day for online sales is Sunday when consumers have time to browse.”

It’s an idea that also Visit Jersey’s support. A report for the tourism body noted: “It would be advantageous, from a tourism perspective, if shops opened on Sundays… An aim of town centre regeneration should be to make it attractive to shops to open on Sundays.” 

The Economic Affairs Scrutiny Panel is continuing its review into political policy governing how islanders shop. It continues to seek evidence, and is expected to hold a number of public hearings with key stakeholders in the near future.

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Posted by Dave Mathews on
What I do not understand about Steve Jewell's comments on behalf of Romerils is that if 5% means so much to their business then how can they afford such massive reductions in their sales?
They must already mark up their prices in such a way that sale reductions can be absorbed.
Posted by Lesley Ricketts on
Many shops in Jersey do not take VAT off of the goods which is totally unfair and there is a lack of choice in the shops and you end up buying something you do not really want so it’s better and cheaper to buy online. Customer Service is far from acceptable in many shops which puts people off buying. Stop moaning retailers and up your game if you want to attract customers!
Posted by Stuart Moon on
This is not confined to Jersey, high streets across the UK are taking a hit. So it cannot be blamed on cost alone. This how people are choosing to shop in 2018. If the retailers own websites don't get that many hits. Amazon is its own high street!
The benefits of Amazon (to me) are a lot more then price. Firstly you have choice, there is nothing you cannot find on Amazon. I don't have go traipsing all over town, parking a mile away and then lumping it back to the car.

Local high street retailers need to join in either through Amazon or through a new Jersey online shopping site. Get same day delivery in and Amazon would soon start playing second fiddle.
Posted by Michael nicolle on
Disgusting action by Jersey Retailers many charge the full English VAT of 20% now they want the consumer to pay an additional 5% on Amazon etc, all the more reason to stay away from local retailers smacks of greed to me if Government agree to this it will be an additional and unnecessary tax on the long suffering Jersey consumer
Posted by S P on
Its been long known that Jersey businesses do not like competition. Its been long known that Jersey retailers have inflated prices and rip people off. Its been long known that people are fed up getting ripped off. The problem lies with the rip off retailers inflating their prices in Jersey because they can and now, everyone has cottoned on and internet shopping has become more viable and easy to all as the internet has taken over. Retailers on Jersey however still expect to keep things the Jersey way and not move with the times when people have moved with times. If one cannot afford to gain profit for their business, then their prices are too high in the first place. They can blame the purchasers all they want and moan and stamp their feet, but he problem lies with themselves, not the buyer, who has easier access to now now seek the lowest prices via the internet. Even my grandmother aged 84 buys all her goods over the internet and gets them delivered to her door, as do my family and my grandchildren, and their friends. I actually do not know of many who still continue to shop for everything on the Island, only food, and even then, much is still bought on the internet. My wife buys regular stocks of sauces and cooking cubes and all sorts from Amazon. The whole Christmas pressie shop is done on Amazon. Why would I want to pay 89 pounds for a pair of Jeans in Voisins when I can the very same on Amazon for 30 percent cheaper ? Of course I would buy online. Only an idiot wouldn't. The retailers are now realising that the boot is on the other foot and they dont like it. Well tough.
Posted by Jon Jon on
Retailers need to realise that shopping has changed,people buy online.Its cheaper,no parking hassle in town,Even with 5% added on goods it will still be cheaper online!
Posted by Tony Jordan on
If I’m forced to pay an additional 5% I will resent the local shops for causing this... do they think I will be more or less likely to use Amazon? Frankly I think they are missing the point, 5% actually changes nothing when the goods I buy from Amazon From TV’s to Cat food are less that half the price of the local shops. You would have to add a 55% sales tax to influence my online shopping. Instead of shops banding together to tax their customers (good way to lose customers btw) maybe band together and bulk buy and use the savings to reduce prices in the shops... you don’t have to match Amazon but if you get within 20% I’d prefer to shop locally.
Posted by Brian Hoy on
Who are you kidding to think that this 5% makes any difference, they too manage to offer cheaper than local and that’s with delivery included and the choice is much better. What I hate about local retailers is the attitude that when I see an item locally and want to order, the usual response is that will be 6-8 weeks where as I can click online and hey presto it’s here 3/4 days later!!!!
Posted by john garner on
Fantastic....just ordered 3 packets of seeds on ebay for 99p each( not sold on the island)..so in future I will be supposed to fill in all the forms for 15p ? I would have more respect for the argument when M and S removes the VAT on food items that attract VAT in the UK ( the jaffa cake fiasco) and stop sticking another 5% on .Also it suits me to order things at 21.00 on a Sunday night ..one off the list and know that they are on their way .
Posted by Kelvin Coldicott on
You’ve got to love local retailers when they openly advertise that they’re ripping you off (10% cheaper than uk high street means you’re being ripped off by 2.5%, and that’s always based on full retail).
Surely a better way would be for local retailers to band together and get a “Jersey Online” website set up so locals could browse local shops online, with delivery options. One local retailer has managed to send me my invoice on line but I’m not able to pay on line. What good is that. I, personally, am prepared to pay a little more to buy locally but not the 30 to 50% that Jersey charges. So bring on gst for online and I’ll shop even more off island for my goods.
Posted by john garner on
Fantastic....just ordered 3 packets of seeds on ebay for 99p each( not sold on the island)..so in future I will be supposed to fill in all the forms for 15p ? I would have more respect for the argument when M and S removes the VAT on food items that attract VAT in the UK ( the jaffa cake fiasco) and stop sticking another 5% on .Also it suits me to order things at 21.00 on a Sunday night ..one off the list and know that they are on their way .
Posted by William Boyd on
As said above, charging 5% on all imports will not make a difference. Ease of purchase, especially for males, is a big attraction for shoppers buying on-line. You can get anything on Amazon. We have to be realistic, times have changed and on-line is here to stay. Local shops have been inflating prices for years and I don't want to hear the 'freight charges' excuse mantra. About 20 years ago I got the Shetlands District Council to price a basket of food goods which was in the Sunday Times who were doing a comparison between London and continental prices. The JEP compared the same basket (so it was scientific) and we were more expensive than London. The 'freight charges' excuse was trotted out by the Chamber of Commerce. So as said, I got the same food basket priced by the Shetlands District Council and lo and behold they were cheaper than Jersey. Note to Chamber, the Shetlands are far further away from the centres of distribution in the U.K. than we are. True, since then we have had 5% slapped on food but the point is still relevant. The Jersey Motor Traders' Association were once asked why new vehicles (no VAT remember) in Jersey were more expensive than the UK. The answer was "we charge what the market can bear" ie what they can get away with. Another point, to collect 5% on every single thing imported to Jersey would require more civil servants and we all know how the private sector hates government spending on civil servants. The £240 is there for a reason, 5% of £240 is £12 which the government say is what it costs to collect duty per item. I still buy in town but I also use on-line. Don't get me started on greedy commercial property owners charging astronomical rents. Greed, that is what will kill local retail, greed pure and simple.
Posted by Heath Perrett on
Totally agree with the comments already posted, sales tax of 50% plus would be needed to bring the over inflated Jersey prices in-line with prices from UK and not just Amazon.
I have too stand out items that were 200% more expensive if bought from a Jersey retailer and neither of the items were purchased from Amazon. Trampoline - £350 delivered from the UK including 20% VAT and 5% GST, the local price was over £700 for the identical item. Breakfast cereal - £2/pack at a UK retailer and £4.50 in Jersey - why? This alone is a difference if 225%, look at things like Pasta and Rice and you can buy 5Kg bags in the UK for the same price as a 500g bag in Jersey. These kind of differnces are not down to GST, rental and transport costs, the retailers and franchise holders are making huge profits and if they were not do you think they would go to the expense of re-branding a retail premise or would they just close it down?
You only have to visit a normal UK high street and realise that people in the UK shop on-line or out of town. Most high streets that I have seen have declined over the past few years and are either empty shops or full of charity shops and estate agents. When you find a town with a thriving shopping street there is normally a historic or educational reason that brings people to the town, two examples in Dorset are Shaftsbury and Sherbourne but these are the exception not the norm.
Rather than bleet on about the de minimis value the retailers should cut their prices to a more realistic level.
Posted by nigel pearce on
It always amuses and annoys me when we get all these comments from people who have no experience of running a retail business.
Amazon run their business from warehouses in cheap locations using minimum wage, minimum hours staff who are worked extremely hard, so hard that some were having breakdowns shown in a programme on TV several years ago.
Amazon does not have to deal with customers direct, giving advice and guidance to people who may or may not buy from them. The customer does all the hard work for Amazon selecting their choice themselves. All they have to do is pack it and despatch it. Because of their influence, they get better deals on rents and rates as they locate in places that are desperate for employment.
All those people complaining about local shops should try running one themselves. With the long hours, rules and regulations and taxes, I don't think many would last long.
I would also like to comment that when I ran my business, we had many customers who came to us complaining that they couldn't get any decent selection of goods and any repairs and service done in their area due to all the little local businesses closing because they could not compete with the internet prices. I also had many who had purchased on the internet come in for alterations to the items they had bought because it was not convenient to return the goods to the supplier.
Every parcel coming into the island should have a minimum of £5 charged on it if it is under £100 and then be charged pro rata above.
If we don't defend local businesses, then expect to see more charity shops in the main street.
Posted by Mike Key on
Why should the public of the island take another cut in pay by way of tax on already over inflated prices just to keep the business owners in a manner to which they have become accustomed. The sad truth is that online buying has just made it easier to access the wider marketplace and competition is competition. Times, as someone stated earlier, have changed, the supermarkets drive the economies, the internet is here to stay!
Posted by B De Gruchy on
Cut the number of people employed by the government and it's quangos and get rid of GST with the savings. Problem solved.
Posted by William Boyd on
This is not just about Amazon who undercut our local shops. I have bought electrical goods from Debenhams on-line, cheaper than Jersey even with the VAT on, then Debenhams took the VAT off! Many other UK retailers have on-line departments now, they have to if they are to survive. As for the wages argument, loads of shops over here pay the Jersey minimum wage - which is less than the UK minimum wage and soon the UK will be paying the mandatory living wage. As I said before I do buy local and shopping can, on occasions, be a way of passing some time, but when one is offered the same product at a 30% discount from an on-line supplier, it is a no brainer. There is now a need to recognise there is a place for both the High St (didn't know we had one actually) and on-line. The High St will not die but it will, indeed has to, adapt.
Posted by Sarek Raktajino on
These people are very shortsighted in wanting to fine me for buying goods that I cannot buy locally.

If I have to pay more then I will have even less cash available to buy other things locally so they will do even less business.
Posted by Shroodle Doodle on
Needed a new chair today, drove into town, parked up and walked through the rain to the shop. First chair I wanted, "Sorry, its a special order, it'll take 4 weeks, is there any other chair you'd like?" Chose another one, off the shop floor, "Oh, sorry, we have to order those in too!, 4 weeks".... No worries, I'll get mine off Amazon and it'll be delivered to my door by Tuesday....
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