Mike Ashley, the billionaire owner of Frasers Group, has publicly criticized proposed government plans to revive the UK's high street, describing them as 'delusional' and warning that retailers face further devastation unless taxes are reduced.
In a letter addressed to the Prime Minister, Ashley, also the former owner of Newcastle United football club, attacked what he termed 'recent populist proposals.' He argued that the government, led by Keir Starmer, should focus on substantive economic challenges rather than initiatives that provide only "good media soundbites."
Ashley specifically took issue with proposals that would increase business rates on online retail warehouses to fund business rates discounts for pubs and clubs, along with stricter regulations for vape and betting shops. He contended that taxing larger retailers further through increased rates is an unsustainable approach. The Frasers Group owns a portfolio of retailers including House of Fraser, Flannels, and Jack Wills.
He identified a "disastrous" approach to business rates and the escalating cost of employing staff as the primary obstacles for businesses. Ashley asserted that policies such as increases to minimum wages and employer National Insurance contributions have negatively impacted retailers, leading to job cuts.
In a plea ahead of the upcoming Budget on October 28, Ashley stated, "These aspects of the hostile business climate can't be allowed to continue or the high streets will be further devastated." He also questioned how the government would support the turnaround of Harvey Nichols, a department store chain recently acquired by Ashley.
Furthermore, Ashley highlighted a growing shop-lifting epidemic in Britain, which he stated costs Frasers Group approximately £40 million annually and poses risks to staff. He called for government measures to better protect retail establishments from theft.
Ashley also addressed remarks made by Andy Burnham, suggesting that retailers offer misleading Recommended Retail Prices (RRPs) and deceptive discounts. Ashley defended the use of significant discounts, citing his Sports Direct brand's practice of advertising "up to 90 per cent off the RRP." He argued that such discounting benefits consumers by providing better value and aiding with the cost of living.
He stated that RRPs, set by brands like Nike, Adidas, and Puma, are not inherently problematic. However, he called for scrutiny of "price fixing" in the sportswear market, where he believes consumers are overpaying because retailers are restricted from offering desired discounts. As an example, he pointed to the consistent price of official England shirts at £134.99 during the recent World Cup, suggesting this uniformity was achieved through anti-competitive tactics.
Ashley criticized the competition watchdog, stating that its fines are "disproportionately low and toothless," which he believes fails to deter such behavior. He concluded by urging the government to focus on legal changes that prevent brands from limiting distribution to support price fixing, citing this as a key area for consumer protection.