Life Turns Sour For Oxford Street’s Mysterious American Candy Stores

For months now, visitors to the U.K.’s most important thoroughfare have been asking the same question: ‘What is it with all these American candy stores?’

From U.S. variations of Sour Patch Kids to Twinkies and assorted sugar-saturated breakfast cereals, some 30-plus American Candy stores of various types have proliferated along London’s Oxford Street quicker than you can say Diabetes Type 2.

Often selling at wildly inflated prices – there are reports of some stores charging customers over $50 for packets of candy – other items on offer include vaping oils and foreign exchange. Not surprisingly, complaints have proliferated, notably that the shops often don’t display prices, sell out-of-date food and counterfeit goods.

Yet on a street where business rates alone for such a store can top $800,000 a year, the economic viability of such an offer at a premier location seemed highly improbable.

This week Westminster’s new Labour council announced that enough is enough, with 30 U.S.-themed candy stores along Oxford Street now being investigated for allegedly failing to pay a collective $9.5 million in business rates.

Oxford Street Woes

The investigation actually tells a deeper story about the malaise that has struck a hugely important and influential shopping street and how landlords and unscrupulous businesses have attempted to play the U.K.’s real estate tax system.

It also shows just how far Oxford Street has fallen in recent times.

In announcing its crackdown, Westminster City Council said it had seized about $573,000 of counterfeit and illegal goods from American candy and souvenir stores in the past six months, including unsafe vapes.

Councillor Adam Hug said they were “not only an eyesore but a threat to the status of what is supposed to be the nation’s premier shopping street” and described the outlets as “far from regular and legitimate businesses”.

A spokesperson said that very few of the stores were “serving sufficient customers to be commercially viable” and added: “Instead, we believe that these properties are used to avoid business rate bills and possibly commit other offences.”

“The problem is that owners of buildings are turning a blind eye to those who sublet them as it means they are not liable for business rates,” said Hug. “This needs to stop and we will be stepping up pressure on landlords to make it clear they are responsible for Oxford Street being overrun with these kinds of stores.”

Westminster City Council said it had recently written to 28 freeholders “urging them to consider the impact of U.S. sweet shops on Oxford Street”.

Its officers are currently taking action to enforce against properties under various civil proceedings, including planning enforcement action where the premises are advertising illegally.

Empty Stores Tax Problem

The issue relates to where the freeholder or long leaseholder would normally have to pay business rates on an empty store but can pass them on to an occupier. The freeholder or long leaseholder allegedly lets to an intermediary company, who in turn lets to the candy stores, usually on licences for minimal rents. Forming multiple limited companies, these operations become near impossible to trail.

For Oxford Street in many ways this is the culmination of the problems of multiple real estate ownership and poor management of a thoroughfare that has become a disparate mess far less than the sum of its parts.

While closure of the candy stores would be welcome, it will also add to the multiple vacancies along the street, plus the loss of department stores Marks & Spencer, Debenhams and House of Fraser, while John Lewis is downsizing. The flagship Topshop closed amid the fast fashion retailer’s collapse and, while new players are coming in such as IKEA, Adidas and Sports Direct, the situation is becoming critical.

To try and reverse the decline Westminster Council has urged owners to take advantage of initiatives like its West End pop-up scheme, which it said had helped some landlords secure a reduction of 70% in the business rates liability.