The impact of online shopping on high street sales has been revealed in a survey of the island’s retail sector.
A retail strategy report commissioned by the Department of Economic Development will be laid before this week’s Tynwald sitting.
It included the results of a survey of 1,000 households which reveals how increased online shopping has affected levels of trade, particularly in Douglas, which now attracts 60 per cent of expenditure on high street comparison goods, compared with 70 per cent in 2006.
Market share across the island has fallen from 84 per cent to 70 per cent.
However, one retail centre has bucked the trend – Tynwald Mills’ market share has increased to just under 6 per cent from 3.5 per cent.
Given this trend towards online shopping, the strategy recommends that more work is done to develop an effective Manx retail presence on the internet.
The Retail Sector Strategy, drafted by consultants PBA Roger Tym in collaboration with leading retailers Peter Horsthuis of Robinsons, Stephen Bradley of Tynwald Mills, Manx Co-op’s Andrew Corrie and JAC Stores’s Chris Blatcher, as well as Carol Glover from Isle of Man Enterprises.
The household survey findings indicate shifts in food spending patterns since 2006 are also revealed in the household survey findings.
Just under half of all spend (49 per cent) goes to stores in Douglas, compared with 60 per cent in 2006. Store openings and reinvestment in the interim by Shoprite and Co-op have attracted increased shares of expenditure to Ramsey (20 per cent, up 2 per cent), Peel (9 per cent, up 3 per cent) and Port Erin (7 per cent, up 1 per cent).
Multiple retailers, none of which are headquartered in the Isle of Man, operate 17 per cent of non-food stores – in Douglas this rises to 36 per cent.
Some 40 per cent of bulky goods spending was in out of town stores.
The strategy identified an action plan to tackle four key aims - supporting variety and competition, maximising on-island expenditure, developing the indigenous retail sector and creating high quality town centre retail environments.
This included the idea of setting up a Town Centre Enabling Fund, which could buy up land and use surplus public sector properties to attract private retail development.
But the DED has ruled out such a move, at least in the short term, noting in its report to Tynwald: ‘This is aspirational and there is an acceptance within the working group that funding is unlikely to be available in the current financial climate.’
The strategy also considers the impact of the ‘Tesco tax’, under which 10 per cent corporate tax rate was extended in April this year to major retailers with an annual profit of more than £500,000.
It means Tesco, M&S and other UK giants will now pay tax to the Manx exchequer based on profits generated here, rather than to the UK taxman.
However, the report notes that some Manx retailers are also subject to the extension, reducing their scope for additional investment.