Advertisement

Online retail giant denies claim that the high street is dying out due to their business as Amazon boss says 82% of shopping takes place offline, committee hears

An Amazon boss has denied the online giant is
An Amazon boss has denied the online giant is

An Amazon boss has denied the online giant is "single-handedly killing the high street" while being grilled by a parliamentary committee.

Lesley Smith, director of public policy, insisted the website is responsible for a "relatively small part" of digital sales in the UK during the meeting for Housing, Communities and Local Government today.

She was also forced to defend suggestions by MPs that Amazon takes advantage of low business rates while making use of the same services and infrastructure as physical retailers.

Some 93,000 retail jobs have been lost in the past year during a high street squeeze, according to an analysis by the British Retail Consortium.

Communities Committee chairman Clive Betts MP asked Ms Smith and three other online bosses on the panel: "Is it true Amazon is single-handedly killing the high street?"

Ms Smith said: "Eighty-two per cent of retail in the UK is in physical retail rather than online. Only 18 per cent is actually online, of which we are a part but a relatively small part.

"There's a huge amount of innovation on the high street and that's partly because customers have changed the way they want to shop."

She said consumers are finding price, choice and convenience on the high street as well as online.

Helen Hayes, Labour MP for Dulwich and West Norwood, then challenged Ms Smith on business rates, suggesting that Amazon was getting a much better deal that her bricks and mortar competitors.

Ms Smith said the company has other costs to cover, such as in investment in technology and delivery, and that it didn't search for places with low business rates to avoid paying as much.

She said: "All retail is highly, highly competitive. We've only been here 20 years, we're a relatively new establishment and we've had very heavy investment in that period. So that will mean that profits are lower and therefore tax will be lower in the shorter term."

John Lewis said online sales have grown by 600% in the last ten years
John Lewis said online sales have grown by 600 per cent in the last ten years

Mr Betts formally requested that Amazon provide business rate figures and sales figures at a later date. Ms Smith said she would "seek advice" before doing so.

Andy Mulcahy, Strategy and Insight Director at IMRG, said he didn't think Amazon was killing the high street.

He said: "The problem we've got here is we've got a 20th Century infrastructure in a 21st Century world and it just hasn't adapted fast enough to the fact that the internet is now the main way through which people engage with stuff."

Julie Howkins, a development manager at Hive.co.uk, agreed that the high street is not being suffocated.

She said: "One of the successes of the high street has been the regeneration of bookshops.

"There are more bookshops opening now than there have been for a number of years and that is primarily because they've had to respond, they've had to change, they've had to become more niche, offering a different kind of retail experience - so I think there are some successes on the high street."

Clayton Hirst, head of corporate affairs at John Lewis, said online sales have grown by 600 per cent in the last ten years and 40 per cent of trade in John Lewis and Partners is online.

But he said 88 per cent of the company's most loyal customers and 80 per cent of app users also shop in store, adding that the company's mission is to combine the best of physical and online retailing.

Addressing business rates, he said: "We aren't one of the retailers who have been complaining. We believe that there is a need to look at business taxation in the round and the fact that it does weigh very heavily on people and property but we are not of the view that you should design a tax to capture a specific business or a specific business model.

"It's fair to say that the UK business taxation system is probably designed in an analogue era and we're now very much in a digital era."

---Watch the latest videos from Yahoo UK---