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B&Q Ireland may close its doors over rates hike

DIY giant B&Q has said it might be forced to pull out of Northern Ireland if controversial new rate levies on larger stores are imposed.

The worrying threat follows Swedish furniture multinational Ikea's announcement that its Belfast store was experiencing "very difficult" trading conditions.

Two weeks ago, Finance Minister Sammy Wilson accused supermarket giant Tesco of attempting to "bully" the Stormont Executive over new business rates for large retailers.

Mr Wilson was defending the proposed increase in rates on commercial premises with a rateable value of more than Pounds 500,000 in order to help smaller traders.

But now hardware behemoth B&Q has voiced its opposition to the proposals, saying: "It remains a very real possibility that we cannot continue to trade in Northern Ireland".

Reacting to the latest development, economist John Simpson said that it was "an extremely strong statement" from B&Q in reaction to Stormont's plans to introduce a retail levy.

"Next and Asda have said similar things, in that putting an extra rating burden on large retailers in Northern Ireland is unfair," said Mr Simpson. "I think B&Q is frightened by a downturn in trade. And Asda has made the point that to compensate for every pound that is raised for this rates revenue, it would have to increase its turnover by Pounds 10.

"These large retailers all make the point that their stores throughout the UK are assessed individually. And they're saying the Northern Ireland stores are not amongst the good profit-makers, and now Stormont is threatening their profitability.

"They are now painting a canvas that says to Mr Wilson: 'Take care, this could be more serious than you imagine'."

A consultation on Mr Wilson's plan -- which involves increasing levies for big stores in order to raise money aimed at giving rate relief to smaller businesses -- closed on October 18.

BACKGROUND

The Northern Ireland Retail Consortium (NIRC) yesterday said Asda, Debenhams, Marks and Spencer, Next, Sainsbury's, Tesco and Toys R Us are recruiting 2,000 staff for Christmas. But NIRC warned that the proposed large retailer levy would increase the operating costs for businesses which are otherwise well-placed to drive growth, attract investment and support jobs.

Source : Claire McNeilly Belfast Telegraph.co.uk
www.istockanalyst.com/business/news/5538881/b-q-may-close-its-doors-over-rates-hike

11 November 2011
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