I had three choices: close it, sell it, or hand it over to the big boys,” said the author Jeanette Winterson in January, referring to the imminent closure of her deli in central London because new business rates starting in April mean her store’s rateable value will rise from £21,500 to £54,000. And she can’t afford it. Winterson described the rates as “a real downer on all entrepreneurship and innovation”, but they will cut the bills for many retailers in struggling towns. According to the Department of Communities and Local Government, nearly three-quarters of businesses in England will see no change, or even a fall. Still, smaller businesses in London and the south-east will invariably suffer because the rates are primarily based on the value, or rentable value, of commercial property.
Business rates are one of three priority campaigns for the British Retail Consortium (BRC), a trade association for UK retailers (the other two are Brexit and Retail 2020, or getting the industry future-ready). The BRC has no beef with taxation of non-residential property per se – the retail industry contributes £7.3bn of rates annually, after all – but it is lobbying for more frequent revaluations (no more surprises) and fairer, more competitive terms. According to the BRC, UK recurrent tax on immovable property is the highest in Europe at 3.4% of GDP, compared to 0.5% in Germany and 2.4% in France.
It’s a slightly dirty word, lobbying, says former KPMG partner now BRC chief executive Helen Dickinson, who alternates between using it and “advocacy”. But if the UK retail sector is to hold its own in a challenging environment – and boy is it challenging – then the BRC’s job as trade representative is to roll up its sleeves and shout the loudest about all the issues that matter to the sector.
Explaining what that means for her day to day, Dickinson is not so much shouting as rasping – she’s got that winter cough – but she’s the consummate professional. She didn’t end up being the most quoted spokesperson at KPMG by chance.
About a third of her time is spent on lobbying, she explains. The other two thirds are speaking to the media – “telling the story of what’s happening in the sector” – and “talking to retailers about issues that are relevant to them as a sector”. The other third, “which is a slight joke, is everything that goes with running a company”, she says.
Yes, let’s talk about that. Dickinson was head of retail at KPMG when she was headhunted in 2013 by the BRC for its top job representing a sector that’s used as an indicator of how the wider economy is performing (retail sales in the UK last year were £388bn). Bearing in mind she’d been in practice for 23 years, a CEO role was perhaps a leap of faith on both sides.
She admits she was conflicted when the BRC came knocking. As any partner will tell you, the journey to the top isn’t easy and Dickinson maintains it’s one of her key achievements, despite having an OBE after her name (maybe she’s still getting used to it, it was awarded in 2016 for services to retail). Perhaps it means more to her because she entered the profession armed with a polytechnic degree rather than a university one, or because her first stab at partnership failed.
People don’t need physical property any more to create businesses. What business taxation should look like and how that needs to change is the real question (Helen Dickinson)
“Certainly if someone had asked me when I started whether I would end up as a partner in the firm I would have laughed, so it was a great achievement to get to that,” she says. “I didn’t get through to partnership the first time I tried, so it took a little bit of resilience to really think about why that was and up my game, which I did. And I’m proud of the focus around retail that the firm had, I was building on what my mentors had started when I was a youngster.”
Walking away from all that must have taken guts. What was she thinking at the time? “I’d spent years saying ‘no, I don’t want to talk to you’,” she says of the headhunters’ phone calls. “And then one day I thought, ‘I’ve got nothing to lose’.
I knew the BRC – I didn’t really know what they did but it seemed interesting. One thing led to another and they ended up offering it to me. It was nightmare city for about five days. The biggest decision of my life.”
So did she feel confident she could step straight into a CEO role without senior executive experience? “No! I was confident I had the knowledge of the industry; an understanding and connectivity with the industry (I’d been working with retailers for nearly 20 years at KPMG). And confident in the analytical skills I had as an accountant. What I didn’t know was anything about advocacy. I’d never run an organisation…”
Someone up high thinks she’s doing a good job: she has the OBE to prove it, and by her own admission she has got to grips with running a membership organisation that was highly respected when she joined but perhaps in need of modernisation. “We have a strategy that’s focused on being industry-leading in what we do,” explains Dickinson. “To be better we knew we needed to have more scale, more retailers to come in and join, and we’ve upgraded our website, moved into a fantastic new office, done a whole load of people and cultural-related things around agile and flexible working.” In a nutshell, she thinks the organisation is in more robust shape.
Getting the retail sector – with all its contrasts – fit for the future is an altogether larger challenge. On the one hand, the industry employs millions and is fantastically diverse – food, leisure, fashion, beauty, logistics, customer service, retail management, loss prevention – the career opportunities are vast. On the other, the challenges it faces are substantial – online shopping, cyber crime, falling footfall, business rates, currency fluctuation, skills shortages, Brexit... But then look at the inspirational success stories: Amancio Ortega, founder of Zara, worth £48.4bn; Jeff Bezos, founder of Amazon, worth £43.34bn; Paula Nickolds, graduate trainee now managing director at John Lewis. But what about the failures? The collapse of BHS and its pension fund; the corporate governance problems at Sports Direct; the accounting scandal at Olympus. You get the picture. “Even articulating what it is we do isn’t straightforward,” says Dickinson.
And the issues affecting a sole trader and those facing a large retailer such as M&S are poles apart. So how does the BRC make sure it’s fulfilling the needs of different parts of the membership while keeping an eye on the future? “The way we do it is to find some overarching priorities that are relevant to everybody, whether they’re big, small, food, or non-food,” explains Dickinson. “There’s also the people agenda: the National Living Wage (NLW); the apprenticeship levy; changes in the workforce. And underneath those, a menu of different topics offering more individual member value such as cyber security, ethical labour and supply chains, or responsible sourcing.”
The BRC will react to the most pressing issues of the day, confirms Dickinson, but it also has a team of future gazers trying to predict how policy-makers or geopolitical circumstances might affect retailers. “Before Mr Osborne even thought of the NLW, we could see on the horizon that the people/pay agenda was bubbling up,” she says. “Some of the campaigning groups were getting quite effective at raising issues so we knew the industry would come under scrutiny and we had to be ready for that.”
In February last year, the BRC published a report saying the effects of the NLW on employment had been underestimated. Like its stance on business rates, it wasn’t saying the intention behind the pay review was wrong, it was saying it hadn’t been thought out properly, would add to the burden already facing retailers and could consequently speed up job cuts (a 2016 Audit Insights report from ICAEW reported that wage rises would not be the only increase to costs for retailers; compliance costs and maintained pay differentials would also hurt). Yet the NLW is in place, and many retailers advocate the policy. I wonder where else Dickinson thinks its advocacy could have gone better? “Business rates,” she says. “We’ve saved the industry probably £2bn, which is a bottom line impact for retail businesses. But we still have a system that’s not fit for purpose in the 21st century,” she says.
So which government policies does she think have harmed retailers the most, and which is she more supportive of? She is diplomatic about where government policy has been punitive: “It’s less about things they’ve done that have been really bad because the job of people like us is to try and shape it as it comes in. The issue is much more around things that are there but aren’t fit for purpose anymore. Which takes us back to business rates.” On the plus side, the BRC was very involved with shaping the Modern Slavery Act, says Dickinson. “Ethical labour is high up the priority list for lots of retail businesses. It started as a consultation and ended up being a piece of legislation, so that’s something that’s positive.”
What she would like the government to review is what business taxation should look like in a globalised world, where physical property is no longer dominant, both in terms of how people choose to sell and where they work. “People don’t need physical property any more to create businesses and because people are working from home more, it’s about flexible working now. What business taxation should look like and how that needs to change is the real question,” she says.
And no, she doesn’t think this plethora of burdens will deter hopeful new entrants to retail, nor does she fear for the sector’s longevity. OK, retail is going through some pretty significant transformational change. “The profitability of retailers is falling, the market isn’t particularly growing that quickly, their cost base is going through the roof with devaluations of the pound on top of business rates, implementation of the Living Wage and so on. It’s a tough old industry to be operating in.” But don’t forget, it’s resilient and experienced. Yes, there will be winners and losers, but that’s free market capitalism.
“We have a world leading retail industry, and it’s highly respected. Its strength is that it is so competitive there will be those that thrive and survive; there will always be opportunity. If someone’s got an idea with a brand that can sit behind it then you can be successful. It’s a meritocratic industry, there are a lot of people who have come in and started at the bottom and ended up at the top.”
And let’s face it, there are still a lot of people who love to shop. It’s the BRC’s job to keep on top of how we shop, and what motivates us. “The technology-driven transformation is only going to accelerate,” observes Dickinson. “Thinking about shops and mobile phones as two different ways of shopping is of the past, it’s all about how connected and seamless the experience is. Connectivity is a big theme. And experience is going to be a big theme. If you can buy something online and have it delivered within half a day, why would you want to go in a shop? There’s got to be more of a reason than just a functional purchase exchange and a lot of businesses are really trying to think about how they make the store process more experiential than it was before.”
Certainly Dickinson walks the walk. She enjoys mooching around shops, that’s how she likes to relax. “I work in retail, I shop! I don’t shop and buy necessarily, I just enjoy the experience.”
She’s grateful to the person whose advice she took when considering the role, which has enabled her to combine pleasure with business.
“When I was thinking of leaving KPMG I was in a major dilemma and someone said to me, ‘what does your head say and what does your heart say?’ My head was telling me to stay at KPMG – a Big Four firm, a partner, why give all that up? And my heart said, ‘if I’m going to do something different now is the time to do it, I’ll never know unless I try’. So I followed my heart and haven’t looked back.”
And there’s that OBE. “I didn’t know that was going to happen, did I?” she exclaims. “You couldn’t have written it!” Well, we’re glad Dickinson gave us the chance to. Chartered accountant turned CEO and officer of the British empire? It’s editorial gold.
Career in a nutshell
2013-present CEO, British Retail Consortium
2012-2016 Chair, Working Chance
2002 Partner, KPMG
1992 Qualified as chartered accountant
1986-89 Kingston Polytechnic