Why are British cities being overrun with American candy stores?

Oxford Street is perhaps London’s most famous avenue for boutique and flagship retail: think Madison Avenue or Rodeo Drive. Until recently, the millions of tourists and locals frequenting it could shop (or window shop) for jewellery, sportswear, and designer brands. All the designer brands. Pre-pandemic, it was the busiest shopping street in Europe, with half a million visitors per *day*.

Of course, the general shift to online shopping and the decay of “bricks and mortar” retail is a phenomenon that has been hastened by the pandemic; and now, soaring inflation and increases in the cost of living have further aggravated the situation for these businesses.

But why are there (at the last count) at least thirty [newly opened American candy stores]( https://www.theguardian.com/business/2022/jul/16/london-oxford-street-from-retail-heaven-to-candy-store-hell) on Oxford Street? Why are the main shopping areas of other British cities also seeing a meteoric growth in American candy stores?

These new outlets are not known to be part of a chain – each one has a different name and different branding – but they all look very much the same. Displays filled mainly with standard American confectionery brands like Hershey bars and Reese’s peanut butter cups, together with some British sweets, vapes, and sometimes a currency exchange desk. The prices are eye-wateringly high, and many of the products are past their sell by dates or even [counterfeit]( https://www.mylondon.news/news/west-london-news/council-boss-doesnt-powers-shut-24478469). Some of the vapes contain illegally high nicotine levels, and lack other safety certifications.

The store employees are regular retail workers, and don’t know why the stores have opened. The owners are mostly networks of foreign shell companies with no assets and no visible points of contact.

Part of the answer has to do with business rates. Businesses in the UK have to pay a tax to their local council, known as business rates. And it’s not small: it’s about 50% of the market rental value of the premises. If you’re paying £10,000 per month to rent your shop, you have to pay the city council £5000 per month.

Now, there’s a lot of debate about whether that is good (as a vital source of revenue for public services) or bad (because it makes it so hard to run a shop as a successful business), but that’s a matter for another time. The point is that the rates have to be paid, and if a shop is standing empty and not leased to anyone, the property owner is on the hook for them. Particularly during the pandemic when not many people wanted to open a shop and many businesses were closing, this meant that property owners were desperate to rent their sites out to absolutely anyone. That shifts the tax burden onto the renter.

And it seems clear that not paying taxes is [part of the American candy store business model]( https://www.theguardian.com/commentisfree/2022/jul/04/us-sweet-shops-rip-off-customers-business-rates-owners). Westminster Council is trying to pursue the ones on Oxford Street for a total of £7.9 million in unpaid taxes, but the ownership tracks back to anonymous companies with no assets. That bill will probably never be paid.

There is also the matter of the counterfeit goods they sell, and strong suspicions that the whole concept is some form of money laundering.

So, there is an explanation for why dodgy businesses are flooding into the spaces left by city-centre retail bankruptcies. But why are they selling American candy? Sure, the UK has a decent population of American expats, and there have always been a few shops in London offering imports of standard American groceries for those of them who miss a taste of home or need an ingredient for a recipe they know.

That market was decently covered beforehand, and didn’t ever rely on renting locations with a lot of walk-in trade. People knew what they wanted, and could buy online or get tips on what to get where from the American community.

It therefore seems certain that the new wave of American candy stores hinges on financial crime… so why make it so obvious? They are painting a massive target on themselves by looking so out of place, and selling goods that have minimal demand. If they just wanted to evade taxes and launder money, they could do that with a front that would not stand out so obviously. Why does it have to be American candy?

Further questions to ponder: someone is opening each new American candy store, hiding their identity. Is it all the same group, is it a looser coalition, or have a whole bunch of people independently come up with… whatever this strategy is? Who are they, what are they doing, and why?

View Reddit by FatherBrownstoneView Source

Comments are closed.