BRC warns that rents could push retailers out of business
The British Retail Consortium (BRC) has announced fears that yesterday was the toughest quarterly rents payments day for over 18 years.
This is because the start of the year is usually the period where consumer spending is lowest and, coupled with the increased uncertainty caused by the credit crunch, the BRC has lead a campaign to encourage landlords to be more flexible.
The BRC campaign has called for more leniency and is encouraging landlords to switch from quarterly to monthly rental agreements which would help retailers with cash flow, which is a major cause for business failure.
The BRC has also asked the government to make a stand on upward-only rent clauses which allow landlords to increase rents each year despite the economic climate.
There are some improvements and collaboration between landlords and retailers with some already engaging in monthly rents and other concessions. However, landlords also have to make sure that they are protecting their shareholders as well as pension funds.
There is also anger from landlords at the role of administrators who oversee the collapse of retailers who are systematically able to override liabilities on unprofitable stores and little concern is given to landlords in that respect.