The Chancellor has delivered Labour’s first Autumn Statement, unveiling a series of key changes that will be felt by the convenience sector.
Let’s see how industry trade bodies have reacted.
Association of Convenience Stores
The convenience sector will face additional costs of £666m next year as local shops face significant new pressures as a result of today’s Budget, the Association of Convenience Stores (ACS) has warned
The impact will be felt unevenly across the UK’s 50,000 convenience stores, with some measures such as business rate relief and the increased employment allowance mitigating costs for smaller independent stores, while providing no help for chains and larger independent businesses, said the trade body.
The financial impact on the convenience sector resulting from the recent announcements made by the Chanceloor is estimated to be around £666m, according to the ACS.
This figure represents a year-on-year difference in the total costs with the key decisions announced.
ACS chief executive, James Lowman, said: “The cold hard facts are that the measures announced in the past 24 hours have added two-thirds of a billion pounds to the direct cost base of the UK’s local shops. At a time when trade is tough and operating costs are stubbornly high, this will be challenging for our members to absorb and there will be some casualties on high streets and in villages and estates across the country.”
Lowman mentioned that not all shops will be impacted the same way.
“The smallest retailers, with low NICs bills and lower rateable values for their shops, will benefit from the welcome increase in the employment allowance and the retention of 40% of the retail, hospitality and leisure business rates relief. Retailers with a larger store, a number of sites or those operating a chain will receive limited benefit from these mitigations, and this will impact their ability to invest and to continue to offer services in the communities they serve,” he said.
The Fed
The Federation of Independent Retailers (the Fed) welcomed the government’s pledge to get tougher on retail crime.
However, the trade body stressed the “rough year ahead” for indies, with the combination of significant increases in the minimum wage and a 1.2% increase to 15% employers’ national insurance contributions.
Responding to today’s budget, national president, Mo Razzaq, said: “While there were some gains, there was also some pain for independent retailers at a time when our finances are being stretched to the limit.”
The promise to crackdown on shoplifting, which is currently at an all-time high, came in the same week that a Fed survey revealed that independent retailers wanted tougher police action.
Commenting on the rises to the national minimum wage, Razzaq said: “As responsible employers we want to ensure we are paying a fair wage to our staff. But a bigger than expected rise to the national living wage to £12.21 an hour from April 2025 is a step too far for hard-pressed small businesses.
“As well as paying our staff more in wages, we must pay more in national insurance and pension costs, at a time when many of our other costs, including energy costs, are rising. There is no easy way for small retailers to combat these increases. As so many of the products that convenience store owners are price marked, we cannot pass these costs onto our customers.”
He explained that the only solution available to independent shop owners is to reduce staff hours and staff numbers and, somehow, take on even more hours themselves.
Putting duty up by 10% on hand rolling tobacco, a flat rate duty on all vaping liquids, a one-off increase in tobacco duty and increases on alcohol duty rates on non-draught products in line with RPI were further blows to independent retailers, Razzaq said.
“When tobacco prices rise, more smokers are lured to the illicit market which damages the business of legitimate retailers and damages communities. The government needs to do more to tackle the illicit market to better protect the livelihoods of members who legitimately sell tobacco.”
Bira
The British Independent Retailers Association (Bira) has condemned today’s Budget as the most damaging for independent retailers in recent memory, with a triple blow of doubled business rates, increased National Insurance, and higher minimum wage costs threatening widespread high street closures.
Andrew Goodacre chief executive of Bira said this is without doubt the worst Budget for independent retailers he has seen in his time representing the sector: “The government’s actions today show complete disregard for the thousands of hard-working shop owners who form the backbone of our high streets.
“Small retailers, who have already endured years of challenging trading conditions, now face a perfect storm of crippling cost increases. Their business rates will more than double as relief drops from 75% to 40%, while they’re hit simultaneously with employer National Insurance rising to 15% and a lower threshold of £5,000, down from £9,100. Add to this the minimum wage increase to £12.21, and many of our members are telling us they simply cannot survive this onslaught.
“One member has already calculated these changes will increase their cost base by £150,000 next year alone,” he said.
Mr Goodacre warned these “punishing measures” will force many shop owners to make heart-breaking decisions about their businesses’ future.
“What makes this particularly bitter is that these are family businesses, often built up over generations, run by people who work incredibly long hours to serve their communities. They’re now being asked to shoulder an impossible burden while trying to compete with online giants who face none of these cost pressures.
“This is clearly an anti-high street Budget. I can only assume that the government is happy for working people to shop online and buy cheap imports. This government has shown complete disregard for the local businesses that create jobs and maintain vibrant communities,” he said.
Goodacre concluded that this Budget betrays every independent retailer who has fought to keep their business alive through recent challenges. “It’s not just disappointing - it’s potentially catastrophic for Britain’s high streets,” he added.
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