Over 80 retail industry bosses including Spar UK, Tesco and The Southern Co-operative have written to Chancellor Rachel Reeves over the recent Budget hikes.
The letter warned that the new measures, such as increasing employers’ national insurance, would cost the sector over £7bn next year.
It wrote that for any retailer, large or small, it “will not be possible to absorb such significant cost increases over such a short timescale”.
“The effect will be to increase inflation, slow pay growth, cause shop closures, and reduce jobs, especially at the entry level. This will impact high streets and customers right across the country. We are already starting to take difficult decisions in our businesses and this will be true across the whole industry and our supply chain,” said the letter.
Additionally, the letter discussed business rates and the government’s effort to reduce the financial burden on the retail and hospitality sectors.
However, under the current proposal, retailers are projected to face an increase of £140m in business rates come April 2025, due to inflationary adjustments and a reduction in the existing retail discount (75% to 40%) for qualifying businesses
“We are concerned the proposals merely redistribute rates within the industry and would see many retailers’ bills significantly increase. Changes must lead to a significant, permanent reduction of rates bills for all retail properties if they are to offset the effects of the extra costs above in any meaningful way,” the letter continued.
The retail sector has called for a meeting with Reeves to discuss these concerns and to collaboratively seek viable solutions. “By adjusting the timings of some of these changes, the government would give businesses time to adjust and greatly mitigate their harmful effects on high streets and consumers.”
The topics for discussion would include National Insurance, packing levies and business rates.
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