Dreams CEO attacks online retailers over tax: 'It's not a level playing field'

Mike Logue, CEO of Dreams.DreamsMike Logue, CEO of Dreams.

LONDON — The boss of UK mattress retailer Dreams launched a thinly-veiled attack on online retailers like Amazon at a conference on Tuesday, calling for the government to tax them more.

Mike Logue told the BRC Retail 2020 conference: “I do not see how you can take billions and billions in revenue and not, in the country where those transactions happen, pay tax.

“I think if that doesn’t change and the government will look back, and we’ll all look back, and go: ‘Oh my god. How did we allow that to happen?’ It’s so basic and fundamental but it’s happening at such a rate and I think customers don’t really realise it. The government needs to make that change.”

Logue did not name any specific online business but the one-day conference was looking at the changing face of retail as a result of the rise of online retailers and other technological innovations.

Amazon, one of the world’s biggest retailers, has faced repeated controversy over its tax arrangements in the UK. It was pressured into changing the way it registered sales in the UK in 2015, after being accused of avoiding corporation tax on profits made in the UK.

More recently retailers have objected to the government’s reassessment of business rates, a tax on business property. Amazon’s warehouses are set for a tax cut while High Street retailers face a hike, which retailers argue gives Amazon an unfair advantage.

A recent National Audit Office report also estimated that the UK has lost out on up to £1.5 billion in tax because of overseas sellers on platforms like Amazon and eBay ignoring VAT rules.

Logue said on Tuesday: “The speed [of change] is profound. I don’t think the country is prepared and certainly, the government isn’t prepared. There isn’ a level playing field to make sure we can continue to invest in our people.”

The Retail 2020 conference was to discuss how to make sure the industry continues to offer good employment but Logue suggested that the lack of a level playing field could lead job losses and poor training at traditional retailers.

He said: “There isn’t a level playing field set out by the government. There will be profound change because the number of jobs lost will speed up, the lack of investment will speed up because the margins are too tight.

“I’ve got a sizable business. I’m quite happy to pay different rates but it’s got to be a level playing field. At the moment the amount of jobs that are being impacted at small retailers and large retailers — it’s unacceptable. It’s going to change the country.”

Mattress retailing has recently become a hugely competitive area of online sales in recent years. US startup Casper, which sells one mattress that is compressed into a box, had revenues of $US200 million last year. It competes with the likes of Leesa and Tuft & Needle in the US, and Simba and Eve Sleep in the UK. All do roughly the same thing: sell a limited range of self-manufactured mattresses that are compressed and then shipped, with generous money back guarantees.

Eve Sleep this week successfully listed shares on London’s high-growth stock market AIM, valued at £140 million.

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