If we are not hurtling towards the biggest assault on the existence of our High Streets then someone explain to me how this represents good news. “Amazon to deliver parcels to 5000 UK cornershops” is today’s headline concerning our online marketeers. You may remember that Amazon is the company that doesn’t pay any tax at all on its £7.6 bn turnover in the UK.
Amazon set to deal a killer blow to British High Streets as it will deliver ordered goods to thousands of corner shops and newsagents throughout the UK. It is already trialling a pilot scheme to test its popularity and the measure to which it will enhance their profits. Barring an unforeseen failure it will roll this out nationally once the numbers have been crunched.
The hoped-for effect of this scheme is that people who are out at work all day will no longer have concerns about parcel delivery, but will be able to collect them from a corner shop on their way back from work. If anyone ever wanted an argument against unbridled capitalism, Amazon is the paradigm for the constrained market argument. There will also be a Collect Plus scheme so that unwanted items can be returned to Amazon, a useful feature for those ordering clothes with sizing problems, coulour mis-matches and damaged warranty goods.
For many traditional retailers being squeezed by the recession on the High Street, this could be the last straw. Amazon are using Paypoint, the card and stick pay facility, to organise the logistics of the Collect Plus delivery scheme. A network of 4,900 stores has been identified as willing to work in such an operation. Spar and Costcutter are already working with Paypoint on this, but seek to expand this to small to middle-sized supermarkets, such as Aldi, Lidl and the Co-operative group.
In the past three years, Amazon has generated sales of more than £7.6bn in the UK without attracting any corporation tax on the profits from those sales. It also gains because, being based in Luxembourg means it can charge VAT on sales at the local rate of 3% rather than the 20% VAT imposed on British-based retailers.It is under investigation by the UK tax authorities as well as several others, including the US Revenue.
If some kind of action is not taken in Europe to halt the Amazonian sharp practices in accounting management and retailing, the shopping streets of Europe will shrink to a shadow of their former selves. The looming crisis seems to be going unnoticed by our government and the EU.