Nearly a month after the Budget, the Association of Convenience Stores (ACS) continues to warn the government about the measures announced concerning the UK convenience sector.
In a letter written to Rachel Reeves MP, the ACS has urged the Chancellor to create the right conditions for growth and investment in the convenience sector in the future.
This means not just a commitment to not raising tax again during the duration of the parliament, but balancing the cost of doing business with the additional burdens of new regulations that will affect the sector, said the trade body.
The letter outlines the projected £666m cost to the sector in 2025, stemming from several changes announced in the Budget:
- A reduction in business rates relief from 75% to 40%
- A reduction in the employer National Insurance Contributions (NICs) threshold from £175 a week to around £96 a week
- An increase in the rate of employer NICs from 13.8% to 15%
- An increase in the rates of the National Living Wage – set to reach £12.21 per hour in April
While some of the smallest businesses will be protected from the employer NICs changes through an increase in the Employment Allowance to £10,500, the majority of convenience stores will be seeing significant operating cost increases in the new year, said the ACS.
Additionally, the letter highlights the challenge of providing low-margin but critical services like bill payment, access to cash and Post Offices at a time when costs are going up and every inch of the store has to work as hard as possible to generate income.
ACS chief executive, James Lowman, warned thousands of retailers are looking at a pretty bleak picture in 2025.“These are already challenging times for convenience stores in an extremely competitive market, but the additional costs that many are facing in increased business rates and wage bills cannot just be absorbed,” he said.
“It’s important that the Government understands that while it makes difficult decisions on taxation and public finances, retailers will be forced to make their own difficult decisions on investment, staff hours and the price of products in store.”
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