Sports Direct tycoon Mike Ashley has launched a scathing attack on Andy Burnham's plans to revive the high street, warning that retail businesses will be further devastated unless taxation is cut.
In a letter sent to the Prime Minister ahead of the Budget on 28 October, the billionaire owner of Frasers Group hit out at recent proposals put forward by Mr Burnham as "simply delusional."
Mr Burnham insisted earlier this week that he intended to take pressure off struggling high-street traders facing soaring operating costs and weakened consumer spending. His proposals include funding business rates discounts for pubs and clubs by increasing business rates on online retail warehouses, alongside introducing tougher regulations for betting shops and vape outlets.
However, Mr Ashley, whose retail group encompasses department store chain House of Fraser, luxury seller Flannels, furniture outlet Sofa.com, clothing brand Jack Wills, and bike merchant Evans Cycles, rejected the proposal to tax larger retail businesses further. He urged politicians to focus on the real economic challenges facing Britain rather than pursuing "topics which provide good media soundbites."
Rising employment costs and business rates
Mr Ashley lambasted what he described as a "disastrous" approach to business rates, identifying property taxation alongside "the dramatically increasing cost of employing people" as the primary obstacles confronting UK retailers.
He argued that policy measures enacted by Sir Keir Starmer's government, including increases to employer National Insurance contributions and statutory minimum wage rates, have backfired by forcing retail companies to cut workforce numbers.
Business rates are commercial property taxes levied on physical premises in Britain, which high-street shopkeepers argue place brick-and-mortar stores at a competitive disadvantage compared to digital retailers. Employer National Insurance represents a statutory tax levied on companies based on worker salaries, which recently saw rate adjustments in government fiscal measures.
Warning ministers of further high-street decline ahead of the upcoming Budget on 28 October, Mr Ashley stated: "These aspects of the hostile business climate can't be allowed to continue or the high streets will be further devastated."
Harvey Nichols rescue and shoplifting surge
The billionaire businessman cited his recent £40 million rescue of troubled luxury department store chain Harvey Nichols earlier this month as evidence of the harsh trading conditions. Challenging Mr Burnham directly over the acquisition, Mr Ashley wrote: "My challenge to you is: how are you going to help with turning Harvey Nichols around?"
Harvey Nichols, founded in 1831, operates upscale department stores selling designer clothing and beauty goods, with its flagship location in Knightsbridge, London. Mr Ashley, who also previously owned Premier League football club Newcastle United, built Frasers Group into one of Britain's largest retail conglomerates after founding Sports Direct in 1982.
Mr Ashley also warned that a shoplifting epidemic is "getting much worse" across Britain, calling on government authorities to implement stronger protection measures for retail stores. He disclosed that Frasers Group suffers financial losses of around £40 million per year due to retail theft, adding that theft incidents frequently put retail workers at physical risk.
Discounting disputes and sportswear price fixing
In his letter, Mr Ashley took aim at previous remarks by Mr Burnham regarding misleading Recommended Retail Prices (RRPs) and phoney price reductions. Defending retail promotions, Mr Ashley noted that his Sports Direct brand frequently advertises discounts of "up to 90 per cent off the RRP" to online shoppers.
Mr Ashley argued that there is no inherent issue with RRP benchmarks established by major sportswear manufacturers such as Nike, Adidas, and Puma. "The driving down of prices through discounting is what helps the consumer by giving them better value and helps with their cost of living," he explained.
Instead of restricting discounts, Mr Ashley urged ministers to investigate allegations of "price fixing" within the sportswear sector, "where consumers will actually be paying too much because retailers can't discount as they want." He highlighted that retail prices for official England football shirts remained "uncannily uniform at £134.99 across the board" during this summer's World Cup tournament as a result of market-limiting tactics.
Criticising the UK competition watchdog for imposing penalties that are "disproportionately low and toothless," Mr Ashley argued that existing enforcement fails to deter anti-competitive market behaviour. Concluding his letter, he urged ministers to reform consumer protection laws: "This is just one example of many; and this should be the focus of government in relation to the protection of consumers: looking at legal changes to prevent brands limiting distribution in order to support price fixing."
