Major bricks and mortar retailers beyond the usual names are starting to wise up to the phenomenon and finally getting a grip. But so are Governments.
First in the US (see our blogs over the last few weeks on how it might affect UK retailers) and, soon, back home in Britain. This week Sainsbury's boss Justin King complained there was no 'level playing field' on tax and that the burden unfairly fell more heavily on bricks and mortar retailers than those online.
Its the long running debate over the burden of business rates finally taken to its logical conclusion. Why should a shop pay more tax on its property when its sales and profit are falling? Why not base taxes more squarely on sales and profit? Whether you agree with King or not, his comments come at a sensitive time. Next week the Government will begin releasing submissions they have received from interested parties ahead of yet another major inquiry into the retail sector.
The Business, Innovation and Skills Select Committee will then begin holding public meetings in Parliament later this month and online retailing will be a key theme. So will tax - thanks to the raging debates over rising business rates in a collapsing high street and taxes paid - or rather not paid - by large multinational online retailers like Amazon.
King has a point. He says: 'Clearly that is not a level playing field and the Government is going have to think hard about how it rebalances that tax take. There is a difference between bricks and mortar retailers - who pay rates, National Insurance and all the other domestic taxes that are due - and online retailers who by virtue of their lack of physical presence in the high street don’t contribute in the same way.'
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| Supermarket boss wants a 'level playing field' on tax |
Supermarkets are big tax payers - largely because they employ lots of people, own or lease lots of property and, let's be honest, because they are firmly based in the UK find it difficult to escape paying their due like others can.
The irony that their race to take shoppers out of town centres has decimated high streets will not be lost on politicians (and any argument that their convenience stores are now helping rebalance that - and believe me, they do make those arguments - must be taken with a giant pinch of salt). But that doesn't mean to say other points they make aren't valid.
So the twists and turns of the debate over the next two or three months will be fascinating to follow. Is it fair to have a local property-based tax? Is it time to put an end to unfettered out of town development and boost towns? Is it right for the Government to level the playing field just because one part of the industry is more successful and bring everyone down to the same, tax-burdened level?
We get the feeling that this is one Government review of the retail sector that will not sit collecting dust for the next two years as the Mary Portas one has done.
As a journalist friend of mine said recently: parliamentary committees do a lot of things but one thing they never do is nothing.
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