The only things more frequent than retail insolvencies are reports on what needs to be done to fix the sector. And it’s notable that former Wickes chief Bill Grimsey’s second report, published on 3 July, came out a week after Oliver Shah’s (pretty damn unauthorised) bio of Philip Green, which pointedly references “the death of the high street” in its title.

Groundhog Day

It’s fair to say that if retailers had a penny for every page of thoughts laid out in every report, white and green paper we’ve seen – from Cameron-hugging publicist extraordinaire Mary Portas through to the first missive from Grimsey, whose last role was as chairman of beleaguered Focus DIY – there would be no crisis. But with the UK government, distracted by Brexit and unsure even what department is responsible for the high street (BBC Five Live were hilariously sent round the houses by both the department for Business and Communities), the chances are that Grimsey will once again be talking firmly to The Hand.

It’s notable though – given the fate of Focus DIY, Toys R Us, Maplin and others – that none of the discussion being had publicly or the Grimsey report itself focuses on the role debt-laden asset-strippers play in the destruction of, in many cases, solvent businesses. While it’s fair enough that Grimsey’s report is focused on the physical environment, it seems an odd oversight. It’s certainly a huge area of Shah’s focus in ‘Damaged Goods…’ given where BHS ended up.

Amid the Grimsey report’s 25 (twenty five!) recommendations, listed here in Costar’s report, we get a slew of the sensible (free parking, replacing business rates and more flexible planning use classes – all things that have been said to death); the meaningless (“embed libraries and public spaces at the heart of each community” – because public spaces are generally somewhere else?); and the totally pointless (setting up a new commission for each town).

Can localism fix things?

Saying local authorities should have more power is fine, but without both money and a clear national strategy that avoids towns racing each other to the bottom (the 2000s boom that saw every town erect a shiny new mall or retail park in the hope of landing its own John Lewis is a large part of what’s made Britain awash with too many shops), it’s pointless.

I’m sorry if this comes across as dismissive, but having sat through countless meetings and written reams of analysis around such papers for the last 13 years, what’s become clear is that real change comes through focus and having a clear, succinct message to go out with. Three recommendations rather than 25 would have been a start. And yes, localism sounds fab but as we all know, there’s no consistency in the level of skills many councils have.

It’s Grim up North – and down South

Some of the best analysis over “at risk” towns has been done by James Child at EG, using data from Radius Data Exchange which says that a third of London retail developers are planning residential uses. This is fine for London but won’t help many regional retail parks in the middle of nowhere crucified by oversupply.

The sad reality is that the public are quite happy guzzling cheap online goods from Asos and Amazon despite the companies’ questionable ethics on tax and work conditions. Also, in many cases, the service or availability in physical stores is not up to scratch. This was something noted on Twitter by the ever-positive editor of trade bible Retail Week, George MacDonald, following a recent foray to Wood Green for a suit and new phone. As a fellow north Londoner, I can tell you there’s no shortage of phone shops in Wood Green.

Reality on rates

Seriously though, we also need some kind of reality check when banding around suggestions that the government can simply “immediately replace” business rates (as Grimsey suggests) while also demanding more cash for the NHS, potholes, schools and gluten intolerant stray dogs (my suggestion). Rates harvest more than £28 billion annually, which represents one of the biggest and more easy-to-collect tax hauls HMRC has. They won’t give it up without a fight.

Change could be coming

Following the U.S. Supreme Court decision over online sales taxes, making online customers pay more to close the gap on e-commerce’s competitive advantage over physical competition looks likely. While the Grimsey report refers to a sales tax in its summary of recommendations, it’s not explored anywhere else in the report despite an announcement in March from chancellor Philip Hammond that such a move was under consideration.

Grimsey’s new report states, in a small section on business rates that “the business rate model… still works well for offices, logistics and distribution uses.”

Except it doesn’t.

With a surge in co-working creating offices from spaces that better recall airport lounges, the traditional rates regime doesn’t work because of the way it classifies space and apportions value. Similarly, if what we all basically agree is that online firms need to shoulder more of the tax burden, then surely that means a wholesale re-think on how logistics (or warehouse) space is taxed? Hiking up business rates on sheds won’t be popular with investors who have piled into the sector in recent years and doing so may not be the answer. But what’s clear is that you can’t revamp business rates while insisting it works well for everything but retail.

Bankrolling the morally bankrupt

Where retail has suffered more than most is through an explosion of debt-fuelled acquisitions, where companies (sometimes profitable ones) are acquired using debt which is rolled on to the back of the business. The most recent example was Maplins which was acquired four years ago by Rutland Partners.

In its July 2014 announcement, it trumpeted plans for “substantial growth in sales and profit”. Yet when the company went bust, Rutland – who were charging Maplins about 15 percent interest on the £90m of debt used to buy the business – were pretty much the company’s only big creditor.

While there is no suggestion anything occurring with Maplins was illegal, the failure to really call out the opaque, morally bankrupt and – in some cases – potentially criminal behaviour witnessed around the insolvency table is startling. It surely needs to be addressed by Britain’s toothless regulators, just as much as balancing out the tax burdens endured by physical retailers needs attention from the Treasury.

Bloated portfolios

The new Grimsey report has an excellent chapter on financial risk, which brings together pretty much every fact you need to know. And, as it makes clear, retailers need to recognise that in many cases “their bloated store portfolios are no longer sustainable.”

Stupidity remains a big barrier to success in retail and the food and beverage sector, which is also under pressure. Take Byron Burger, which thought having no less than three restaurants in the centre of Manchester made sense before it decided to close two of them recently. McDonald’s share price is only a few dollars off an all time high, so the market for hamburgers and shakes is clearly still rather strong, just not in the ridiculous price point charged by the new crop of pompous patty peddlers.

Whoppers

One bloated example of the years of frivolous excess that have gotten us here is Philip Green, perfectly captured on the grizzly front cover of Shah’s book, ‘Damaged Goods’ (which you can buy here from Waterstones rather than an online-only outlet). The Sunday Times business editor meticulously assembles the cast of shady characters in Green’s cartoonish stable of crooks (more Eastenders than Peaky Blinders) who make their millions dismantling Sears, one of the great post-war retail empires, before turning their attention to BHS. The department store in fairness, was run as a going concern – unlike Sears. But what confidence can anyone have in a system that allows people to extract hundreds of millions of pounds in dividends before winding a company up and leaving others out of pocket? What part of that is not theft?

Just as there’s no answer from ministers, Shah’s grim tale has few winners. Indeed, the main takeaway is the setting of a countdown to when a similar miserable fate to BHS’s may befall Topshop and the wider Arcadia empire, which no sane investor would surely touch.

While some commentators robotically call for the quashing of business rates as the easy way to fix retail, such speculation belongs in cloud cuckoo land. Rates make up a whopping £28bn of easy-to-collect tax income. However, a web-levied sales tax – like the one just imposed in the U.S. – could generate a chunk of cash to be used to help mitigate firms’ spiraling rates bills. Some estimates put this at around £9bn.

Grimsey is totally right to suggest that we need a mix of actors to play their part, but what it needs is proper strategic leadership, a more democratic tax regime and better safeguards to prevent businesses being torn apart.

How many John Lewises do we need?

The problems with retail won’t be easily fixed but the best way of demonstrating why we need a strategic, national view on these things is to consider the years of terrible urban planning, which have failed to take a view over the role retail parks and sea-swallowing malls have played in hollowing out town centres and high streets. Britain – unlike countries such as Italy – is over-shopped, as everyone now agrees.

This is evident in high street giants such as House of Fraser buckling under their own weight following dismal trading figures and an unsustainable cost base, which ultimately forced it to close half of its stores (including its Oxford Street flagship). As I’ve explained on Sky News, the choice successful retailers are making is to redefine what bricks and mortar stores are actually for. Increasingly, this will be to act as living breathing billboards for their online wares, but saying that, there are only so many John Lewis stores that we need.

Indeed, property sources suggest John Lewis will pay close to no rent at the next wave of stores it is opening in London. The failure of property valuers to fully disclose rent-free periods and other perks (in a bid to protect the value of assets) is another concern that industry bodies seem equally deaf to. But I suspect that’s something for another day.