An Amazon boss has denied the online giant is ‘single-handedly killing the high street’ as she was grilled by MPs in Parliament today.
Amazon director of public policy Lesley Smith was questioned by a parliamentary committee investigating the death of UK town centres as shops close down.
She was questioned after shocking new statistics revealed 93,000 retail jobs have been lost in the past year amid a crunch on the high street.
But Ms Smith denied Amazon was the problem, insisting retail is a ‘changing environment’ and her company was simply ‘meeting customers where they want to be’.
Online chiefs: (Left to right:) Lesley Smith, Director Public Policy at Amazon UK, Andy Mulcahy, from online retail association IMRG, Julie Howkins, from Hive.co.uk, and Clayton Hirst, of John Lewis
Parliament’s Communities Committee chairman Clive Betts MP asked the four online bosses: ‘Is it true Amazon is single handedly killing the high street?’
Ms Smith replied: ‘I would say for Amazon that 82% of retail in the UK is from physical rather online, so only 18% is actually online of which we are a part, but a relatively small part.
‘And there is a huge amount of innovation on the High Street and that’s partly because customers have changed the way they shop for the same things they always have done.’
Mr Betts replied: ‘But 18% is 18% of sales that would otherwise be being done physically in shops.’
But Ms Smith insisted Amazon was in fact supporting high street stores and even setting up some new shops.
‘Half of the things that are bought on Amazon, are not bought from us, they are bought from third party business, many of which have got high street stores.’
MP Helen Hayes said shops in her constituency say customers often browse in store then, once they’ve chosen what they want, go home and buy it online.
Ms Smith repeated her claims that Amazon helps shops.
High streets have seen widespread shop closures as customers move to online retailers
Amazon director Lesley Smith denied that her company was behind the high street strife
MPs suggesting Amazon was taking advantage of lower business rates because they have out of town warehouses rather than high street shops.
Ms Hayes says said high street shops complained online firms ‘are paying less tax while taking advantage of the same services and infrastructure than bricks and mortar retailers’.
Ms Smith insisted that her company incurs other costs, such as the need to invest in technology and delivery.
She denied Amazon searched for places with low local business rates to avoid paying as much tax as competitors.
Drop in number of Christmas shoppers
The number of Christmas shoppers heading for the high street, shopping centres and retail parks last week fell just 0.1% on the same period last year.
It may seem like good news for retailers in the age of internet shopping but analysts have warned the picture is not as rosy as it appears.
The drop comes on the back of a 7.6% decline in footfall to physical retailers in 2017, when transport disruption caused by snow and ice kept people from the shops, and a previous fall of 2.5% in 2016.
Research by retail intelligence company Springboard showed footfall was particularly weak last Saturday as parts of the country were hit by Storm Deidre.
It expects there to be an average drop in footfall over the next week of 3.5% – made up of a 3.2% fall to the high street, a 2.8% drop in retail parks and 4.8% decline in visits to shopping centres.
Clayton Hirst, from John Lewis, told the committee that businesses like his faces much higher business rates and taxes for employees compared to online-only retailers.
Explaining the success of online firms, Andy Mulcahy, from online retail association IMRG, said British consumers were particularly open to only shopping due to good roads allowing quick delivery, trust in businesses not to defraud customers, and a history of ‘distant selling’.
There have been a string of high-profile store closures as shoppers desert town centres and flock to web titans instead.
Analysis by the British Retail Consortium shows there were 3m people working in retail in September, the most recent month for which figures are available, down from 3.1m a year earlier.
Household names Marks & Spencer, Debenhams and House of Fraser have all announced store closures, while others such as Maplin, Toys R Us and Poundworld went bust this year.
Tough trading conditions triggered by the rise of the internet and a temporary squeeze on living standards after the Brexit vote are behind the crisis. And campaigners have warned that sky-high business rates make it even worse, by forcing companies to spend vast sums on tax for shops which are struggling to turn a profit.
Jessops chairman and Dragons’ Den star Peter Jones said the Government needed to do more to ease the burden on retailers.
‘Sadly we’ve spent so long looking at and focusing on Brexit, we’ve really tiptoed around trying to support the High Street,’ he said.
The Amazon chief insisted many of the sales made through the firm helped support shops
‘If the Government doesn’t take action we’re going to see many more brands on the High Street dissipate like an Alka-Seltzer in a swimming pool.’
Sports Direct tycoon Mike Ashley has called for a tax on internet shopping to help revive the High Street’s fortunes. In an extraordinary exchange with MPs this month, Ashley said the ‘internet is killing the High Street’.
Meanwhile Ashley, 54, is embroiled in a public battle with Debenhams in which he has a near 30pc stake, after the department store spurned his offer of a £40m interest-free loan in return for an additional 10pc shareholding.
Ashley, has suggested Debenhams has little chance of survival after it lost almost £500m in the year to September, the biggest full-year loss in its 240 years on the High Street.
But Debenhams chairman Sir Ian Cheshire hit back, challenging Ashley to put his money where his mouth is and make a formal takeover bid.
Cheshire said: ‘If you want to make an offer for the other 70pc you don’t own, then you’re free at any time.’
Which high street retailers have closed shops in 2018?
Poundworld is among the many high street brands to have closed stores this year
The year has seen a bloodbath of Britain’s high streets – with many of the nation’s retailers shutting stores and axing jobs.
Here are some of the big name retailers which have lost out as they face fierce competition from the rise of online shopping
The carpet retailer is closing 92 stores across the UK. These closures represent nearly a quarter of all UK Carpetright stores.
Toys R’ Us
The UK’s largest toy shop went into administration in February 201, leading to an estimated 2,000 redundancies.
House of Fraser
The department store chain was on the verge of heading into administration but was rescued at the eleventh hour by Sports Direct owner Mike Ashley.
The electronics giant has gone bust, closing shops across the country and putting thousands of jobs at risk.
The baby and toddler chain is closing 60 shops across the UK putting up to 900 jobs at risk.
Poundworld announced it was going into administration on June 11 after talks with potential buyer R Capital broke down, putting 5,100 jobs at risk.
The DIY chain set to close 42 DIY outlets shut, putting around 1,500 jobs at risk.
Marks & Spencer
The retailer announced in May it plans to close 100 stores by 2022, putting hundreds of jobs at risk.
In August stores in Northampton, Falkirk, Kettering, Newmarket, New Mersey Speke, Stockton and Walsall all ceased trading.