The boss of Waterstones has defended the government’s approach to the high street, arguing that controversial changes to business rates were “sensible” and had benefited outlets in struggling areas.
James Daunt said the bookseller’s total business rates bill for this year was going to be similar to last year’s as big increases at large, successful sites such as its flagship on London’s Piccadilly had been offset by “quite significant” decreases at shops in more troubled locations.
He said he believed “our main advantage is that we will get neighbours back again” in places such as Newport in Wales, Grimsby in Lincolnshire and Barrow-in-Furness in Cumbria, as retailers might now consider reopening amid lower business rates.
The chancellor, Rachel Reeves, has faced a backlash over the looming tax changes from leisure businesses, particularly pubs, which had faced a 76% rise on average over the next three years. She has now promised a support package to mitigate the impact that could come as early as Tuesday, but confirmed at Davos last week that the support would only be for pubs and not the wider hospitality sector.
The boss of Waterstones, which has 316 bookshops in the UK, including Foyles, Blackwells as well as its main chain and Barnes & Noble in the US, was also relaxed about the higher legal minimum wage and much-criticised increases to employers’ national insurance contributions that came in last April.
Daunt said Waterstones had seen extra costs as a result but “from our perspective nothing we are being asked to do are things that don’t feel manageable and reasonable”.
“I have been complaining long and hard all through the Conservative years about government failing to support the high street and particularly less affluent high streets where [we paid] totally disproportionate business rates,” he said, arguing that the Labour government was now “trying to do sensible things” to help.
Daunt’s argument that rates are good for small retailers runs counter to comments from the trade body representing thousands of independent bookshops. After the budget, Meryl Halls, managing director of the Booksellers Association, said: “The Booksellers Association has been clear from the outset that the government’s business rates reforms risk being deeply damaging, particularly for small and medium-sized bookshops.”
She said that a recent survey of members found 85% were less likely to invest in stock, staffing, events or their premises “as a direct result of the Westminster budget’s business rates changes”.
Many UK retailers have complained of higher tax bills after changes in the 2024 budget. Daunt said Waterstones had not been badly affected by increases in employers’ national insurance last year as it did not generally employ people on short-hour contracts, which were most affected by the changes.
He said he was not concerned about new rights for workers due to come in from April under the Employment Rights Act as “we are already well ahead of that”.
Daunt’s comments came as accounts published at Companies House revealed sales at Waterstones’ UK trading arm rose 7% to £565.6m in the year to 3 May 2025. Pre-tax profits fell back by about £3m to £40m, largely as a result of a £2.6m one off cost related to a cyber-attack on its supplier, Blue Yonder.
The company paid out nearly £34m in dividends to its private equity owner Elliott Investment Management – £5m in August 2024, £23.8m in May 2025 and a further £5m in June 2025. That comes after Elliott reportedly hired advisers for a public listing of the bookseller, either in London or the US.
Daunt said he was “very relaxed” about a potential IPO as it seemed “highly probable” that Elliott would sell the business “at some point”, adding: “That’s what private equity do.” He said Elliott had “bought us for not very much and we have turned the US business around pretty dramatically”.
He said the company, which is planning to open 10 stores a year in the UK, continued to trade well through Christmas last year and into January as book fans were being inspired by sharing on social media including TikTok.
“Bookselling is enjoying a nice time. We had a good Christmas and January. It is not just us, independents are also doing well. It has been very good since the pandemic.
“Clearly people who buy books are buying an awful lot more of them.”
He said trends in reading were changing, often led by social media, so that bestsellers could be quite unusual. He singled out Mona’s Eyes, a translation of a French novel by Thomas Schlesser, which took off over Christmas in the US.
