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Economics

Student Videos

Turnover Rents

Level:
AS, A Level, IB
Board:
AQA, Edexcel, OCR, IB, Eduqas, WJEC

This short study video looks at the use of turnover rents by businesses.

Turnover Rents

A turnover rent is where the rent payable by the tenant (such as a retail business) is calculated either wholly, or partly, by the actual turnover achieved by the business in each time period. For example, following lengthy negotiations with landlords, 402 New Look stores will pay rent based on how much sales they take in.

It will be interesting to see if turnover rents become more widespread in a retail industry that has been hit so hard by the coronavirus pandemic. New Look is an interesting example because they have so many stores on the high street and in shopping malls. In this sense, they have quite a bit of leverage or power with landlords' keen to avoid having a major retail player shut down. Smaller businesses might find it harder to reach such an agreement.

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