See also:
https://whynow.co.uk/read/candy-shops-oxford-street
https://old.reddit.com/r/london/comments/m3lh95/those_americ...
https://old.reddit.com/r/london/comments/cnkcaz/private_eye_...
Just do the napkin math of what the rent is and how many sweets are bought in a shop, and the catchment of each shop.
For reference I had a look at a large restaurant unit in the suburbs. £120k rent and rates (local business tax) per year. That's £10k worth of sweets you'll need to sell each month, just to cover rent, and it's not Oxford Street in the middle of London. (My guess is rent on Oxford Street is a low multiple.) That's a thousand people a month who have to spend a tenner on sweets over 30 days, 30-odd people a day including weekends. Initially plausible, since there's a lot of footfall, but:
- Someone who buys sweets in one shop is not gonna buy again in another down the road. There's so many of these shops on and around Oxford Street.
- Most people aren't into sweets. Kids are, but they are only a small proportion of Oxford Street footfall.
- The shops have a bunch of staff too. Guessing minimum wage, but that will add ~20K per head per year when you add employment related taxes.
- Fitting the shop costs a few 10K.
- Sweets themselves cost something, probably not a huge amount compared to the sale price, but something.
Compare them to the Apple shop, which certainly sells enough stuff to pay rent. Their shop is constantly heaving with people, and their items for sale can cost thousands. These candy stores, when you walk by, are pretty much empty, and they sell something that can be satisfied for a quid.
The Amsterdam municipality has stopped granting any new permits for these tourist shops now.
At the same time if you are in a country where there's some sort of employment related benefit or you get higher unemployment after having worked, you can put a bunch of your gang on the payroll.
If you're interested in learning more about money laundering, check out the Dark Money Files podcast. https://www.thedarkmoneyfiles.com
- Kebab shops who declares tons and tons of sales but nobody is ever seen entering the store and it's always empty. - China goods stores that are the same.
Classic money laundering for drugs and other illegal activities. I guess candy stores is the new thing.
How can these shops possibly sell enough candy to its target market of kids to pay the rent, when there are no kids on Oxford St.? Something from 'under the counter' instead?
Or just a case of the "landlord" filling it until someone better comes along because Westminster City Council absolutely have to make Oxford St. look like it's busy and bustling as it's allegedly the UK's most popular shopping street? It would lose it's reputation if it looked like any other UK high street, that is to say, full of closed shops and nail bars.
To be honest, it wasn't much different in the 80s and 90s. More major shops, but still lots of weird ones that had no right to exist on Oxford St. but were there nonetheless. In 2022, it's far more obvious.
These pages are much more interesting.
EDIT: The business models I am referring to are “dubious trading, maybe even money laundering”, not “candy stores”.
These shops are very very prevalent on Oxford Street, to the point of there being ten to twelve in the course of several hundred meters. They all have cheap signage, incredibly expensive stock and, other than tourists, very little footfall. They all look quite sketchy.
1) "cheap signage" - so they are minimising costs?
2) "expensive stock" - maximising profits
3) "low footfall" - this does seem odd
I still think that they get some deal on the rent, but they could also be dodgy at the same time. Would be nice if they were replaced by better shops.
1. The landlord loses his long-standing tenant during lockdown because they can't afford rent anymore.
2. Instead of letting the shop go empty, the landlord creates their own separate sweet shop company and effectively pays rent to themselves.
3. Towards the end of the tax year, the shop is declared bankrupt. The landlord can take some tax benefits for having a failed tenant who can't pay the bills.
4. Typically the shop would have to auction everything they own (signage, shelves, tills, products) to claim back money, but no one wants to buy American sweets at a business auction.
5. The landlord puts the sweets into storage (they have long expiry dates and don't take up much space) and repeats the same trick next year.
It's a way to fill a commercial unit until a more permanent tenant arrives. So they shut down and reopen elsewhere because the situation was always temporary.