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News - 27 August 2006
But is the rent payable a quarter in advance?

Retail rent campaign gathers momentum

A campaign to end a historic rents practice reported on this site in June is doubling in size. The British Retail Consortium (BRC) has announced that it is now backed by 80,000 small retailers as well as a string of major chains and 51 MPs.

The BRC is calling on landlords to accept shop rents a month in advance rather than demanding three months in advance. The BRC estimates that this centuries-old practice costs retailers an extra £145 million a year and creates serious cash flow difficulties, especially for small retailers.

Four trade associations, including the Association of Convenience stores have joined nine already backing the campaign. That adds another 40,000 small shops to the list of supporters, which already includes major retailers such as Next, Travis Perkins and Dreams. In a further boost to the campaign 51 MPs have signed an Early Day Motion urging landlords to pledge to accept rents monthly in advance, helping their tenants continue to trade in an increasingly difficult market place.

Director General of the British Retail Consortium Kevin Hawkins said: "The growing scale of support for this campaign indicates the pressure retailers of all sizes are under. At a time when they are being squeezed by rents, rates, service charges, wage and energy bills rising well above inflation, this archaic rents practice adds an extra burden they could do without.

"Customers don't buy goods three months ahead so stumping up a quarter's rent in advance creates severe cash flow difficulties, especially for small retailers. That's why such overwhelming numbers are coming out in support of change.

 "Monthly payment is already being used in some deals. More of that flexibility from landlords would make a real difference to struggling retailers."

The BRC has launched a dedicated website (www.rentmonthly.org.uk) to communicate with landlords and tenants and monitor how landlords respond to tenant requests for rent on monthly terms. Later this year the BRC will launch a Standard to recognise those landlords who offer more flexible terms.

Setting out its case to landlords the BRC says:

  • Monthly payment, already used in some deals, eases cash-flow pressures - especially for hard-pressed smaller retailers.
  • Paying rent three months in advance is at odds with standard business practice where payment is normally expected only after goods or services have been received.
  • The practice adds a further £145 million a year to the costs of retailers who are also struggling with sharply rising rents, service charges and energy costs. It is in landlords' own best interests to see a thriving retail sector. They lose too when retailers are driven out of business by excessive costs.
  • Government has asked landlords to be more flexible and threatened the sector with legislation.


Read related items on:
Retail, pubs, clubs and restaurants
Association of Convenience Stores
British Retail Consortium
Hawkins, Kevin


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