Mike Ashley Calls for 20% on Online Sales

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Mike Ashley Calls for 20% on Online Sales.

Eley's article provides significant and influential arguments concerning the need for the British government to introduce a 20 percent tax on all sales made on online platforms. The author borrows from the arguments of Michael Ashley who argues that by imposing a tax cut the government will be acting on saving the bricks-and-mortar stores. I believe that gradually due to the growing popularity of online internet shopping has become a reality, and this situation has adversely affected brick-and-mortar businesses. Therefore, I am convinced that this situation creates a competitive advantage for virtual stores. According to Fuchs (2018, p.9), consumers still go to stores near where they live; nonetheless, these businesses have certainly lost customers due to the existence of online shopping. For that reason, I am inclined to believe that through the introduction of taxation on online sales then the government will create additional competition between the virtual and brick-and-mortar stores.

Main event and findings of the article

The main findings of the article are underlined by the arguments presented by Michael Ashley who argues that the brick-and-mortar stores are in crisis due to the existence of e-commerce. After reading Eley's article, I have gathered that owners running shops in the main shopping districts in London find that the unregulated presence of virtual stored threatens the achievement of a maximum profit function in the sector. According to Eley (2018), the crisis in the sector impends the realization of development of main high streets that include Westfield and Oxford Street because the sector is already dead because of the existence of virtual stored. By placing a tax on sales made online, the government will be solving the crisis in the brick-and-mortar business sector.

After reading the article, I discovered that the entrepreneurs running the brick-and-mortar stores incur more costs of operations due to the growing popularity of e-commerce. While appearing before a select committee, Michael Ashley argued that businesses are forced to pay rents that are no longer sustainable. Further, to restore sustainability in the sector, the local councils should provide retailers with significant grace periods regarding the collection of business rates for retailers to match with the investments in the virtual stores. Based on my assessment there is unfair competition between virtual and brick-and-mortar stores because, in the end, people get to cheat. To create a level market competition field then the government should come up with policies that can deter manipulation (Lee, 2006, p.42).

Eley’s article possesses a stable foundation and compelling arguments regarding hoe online shopping has affected the department stores. For example, the author states that due to e-commerce Debenhams is facing significant challenges that have threatened its operations. These circumstances have forced Michael Ashley who holds a stake in the department store group to support the imposition of a 20 percent tax cut on online sales.  I believe that for the British government to benefit the mainstream high streets, and then it is imperative that a tax cut is imposed. Schmid (2013, p.371), acknowledges that through placing a tax on online sales the government tries to force e-commerce market leaders to consider the need of investing and setting up physical retail shops. 

Summary of the main issue

The main...