Friday, February 19, 2021
Retailing and Capitalism
The coronavirus is not the only cause of Topshop’s fall. It was part of the Arcadia empire owned by Philip Green. This also included British Home Stores (BHS), which earlier vanished because its owner was uninterested in developing the business and merely used it as a milch cow to purchase lavish yachts.
It is not good enough, however, simply to blame bad management for the collapse of such chains and praise those that have survived and even thrived for their greater wisdom in developing online services, or more commonly by exploiting workers more brutally or by squeezing their suppliers more effectively. Many of the failures were in reality making buckets of money for their owners, who have little interest in the long-term future of the business.
This was just one case, when more often than not the actual shops are owned by chains of companies doing nothing but collecting “management fees” with the ultimate owner being a brass plate affixed to a wall in a sunny tax haven. To reduce taxation, separate companies are set up to trade artificially with each other so in theory profits are reduced until paid out in the tax haven.
Another lesson of the crisis is that customers have come to notice that many of the various chains that seem to compete with each other actually have the same owner. A harsh lesson in monopolisation for the masses.
The working class has been very unsentimental about retailing. It let the Co-operative movement go down the plughole whenever the opportunity arose for tuppence off a loaf in the nice shiny new American-style supermarket. Although it is a comparatively small issue, too many customers like to take advice about major purchases from shops such as John Lewis and Mothercare before ordering them from cheaper online warehouse retailers on their mobile phone outside the shop door, if they can wait that long. A few months later they lament the departure of their favourite window-shopping establishment.
Whilst Amazon has no qualms about selling Marx’s Capital and more modern books on how to overthrow capitalism, potential purchasers ought to show more discrimination about to whom they hand over their hard-earned cash.
Members of shop-workers’ union USDAW have borne the brunt of the crisis rather than shareholders. Last year saw the loss of 180,000 retail job losses and about 20,000 store closures. Trade bodies expect the present year to be worse.
The union wants to see the extension of the business-rates holiday and a moratorium on shop evictions for non-payment of rent. It wants a one per cent levy on online sales and amendments to lease arrangements. All modest reforms that will benefit private companies more than workers. It also notes that over the last 20 years online Amazon has paid a total of £61.7 million in corporation tax, whereas bricks and mortar Marks and Spencer paid £3.3 billion on a smaller turnover. Clamping down on that sort of tax avoidance would be a great step forward and the proceeds could be used to meet the unions’ other demands for union learning and high-quality apprenticeships and the introduction of a real living wage with guaranteed hours and improvements to Statutory Sick Pay (SSP).
In Chartist days workers often organised boycotts of bad shopkeepers. That would be difficult nowadays – but if working class solidarity means anything it ought to be brought back whenever shop workers have a fight with their employers.