The boss of Danish retailer Sostrene Grene has accused the Government of taking an approach towards Shein and Temu that is ‘killing retail in the UK’. 

Mikkel Grene joins the bosses of businesses, including Primark and Marks & Spencer, in calling for a crackdown on the Chinese online retailers. 

They have urged ministers to scrap a rule that allows Shein and Temu to post parcels worth up to £135 to the UK without paying duty. 

Chancellor Rachel Reeves has promised a clampdown but said it could take place as late as March 2029, so that the Government can ‘consult on the technical detail’ first.

Grene said ‘it is not an even playing field’, adding the tax disparity was ‘killing retail in the UK’. 

Crackdowns in the EU and US mean that goods are being funnelled to the UK. 

Firms including Argos, Debenhams and Currys have previously attacked the rule. 

Shein and Temu are also not subject to the same ‘strict rules’ on product quality, meaning that products can contain harmful chemicals and safety hazards, Grene said.

The EU is preparing to hit firms with hefty fines if they are found to sell illegal or unsafe goods, but retailers ‘can just get away’ with this when importing to the UK, Grene said.

Last July, the EU justice commissioner found evidence that Chinese retailers are bypassing EU laws on safety - including cases of baby soothers with choking hazards and children’s raincoats containing toxic chemicals.

Andrew Goodacre, the chief executive of the British Independent Retailers Association, said: 'If a dangerous product is bought from a shop, the customer knows that they can go to Trading Standards and the retailer could be fined or prosecuted. It seems to be a different set of rules for online market places.

'We want to see the owners of all online market places held accountable for product safety.'

There are fears of the UK being flooded with cheap imports when the EU introduces a €3 (£2.60) fee for imports worth €150 (£130.80) or less to tackle a similar loophole this year – ahead of bringing in permanent reforms from July 2028.

The US has already closed a similar loophole.

Søstrene Grene sells a variety of products from homeware to craft supplies.

Grene believes the business is well suited to cash in as consumers feel the squeeze due to its low prices, which include bowls as cheap as £2.50.

Since the invasion of Ukraine in 2022, which spiked household energy bills, there has been ‘one crisis on top of the other,’ Grene explains.

This means that customers are now ‘really, really price oriented.’

The retailer is opening shops in the UK at a time when stores face higher costs including increases to business rates and wages.

But Grene believes that his shops provide customers with a ‘parallel universe’ thanks to ambient lighting and classical music.

He added: ‘Retail should also be some sort of escapism, because there's so much going on in the world these days, geopolitically, with people's private economy, there’s a lot of pressure on households.

‘People still need this room or space to get away from it all and just indulge in a good retail experience.’

Products relating to creative hobbies - such as crafts, decorating and party hosting - are doing well at the minute, Grene says, as more shoppers want to spend less time on their phones.

He said it appears there is demand for activities which involve ‘sitting down, doing something that actually takes time, and you need to use your hands, and you can actually feel something really physical.’

A spokesperon at Shein said they have been 'engaging constructively' with the Government on its proposed reforms and that its success was 'not dependent' on the parcel loophole.

They added: 'Advocating for measures that risk increasing costs for British shoppers in the name of competitiveness will not ultimately benefit British consumers or retailers. 

'The challenges facing the retail sector as more shopping moves online long pre-date Shein's arrival, and we share the goal of a thriving, competitive UK retail sector, which is why we continue to expand access to our marketplace for British brands and retailers.'