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Two-thirds of CFOs expect further price rises
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Majority are pessimistic about trading
conditions
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Almost nine in ten cited tax and regulatory burden as a
top concern
New polling from the British Retail Consortium (BRC) shows
significant concern among retail finance chiefs, who say
government policy is driving up inflation and job losses. A
survey of CFOs (Chief Financial Officers) and Finance Directors
at retailers together representing over 9,000 stores comes as the
Chancellor is preparing for the next Budget.
Given concerns about potential tax rises on the horizon, 56% of
CFOs described their feelings about trading conditions over the
next 12 months as “pessimistic”, with only 11% suggesting they
were optimistic (33% were neither optimistic nor pessimistic).
When asked about the consequences of the last Budget, which saw
huge increases to employer National Insurance and National Living
Wage, 85% of CFOs said their businesses had been forced to raise
prices, with two-thirds (65%) predicting further rises in the
coming year. Given inflation has been rising steadily over recent
months, with food inflation now at 4.0% (BRC-NielsenIQ Shop Price
Monitor), the BRC now predicts food inflation will be up to 6% by
the end of the year. This will pose significant challenges to
household budgets, particularly in the run up to Christmas.
Jobs were also at risk: 42% of CFOs said they had frozen
recruitment, while 38% said they had reduced job numbers
in-store. This was reflected in the official job figures, with
almost 100,000 fewer retail jobs in the first quarter of 2025
compared to the previous year. Investment in local communities
has also suffered. 38% of CFOs suggested they had reduced
investment, while one in six (15%) had already delayed opening
new stores.
The biggest financial fear – those appearing in almost 9 out of
10 CFOs “top 3 concerns for their business” (88%) – was the “Tax
and regulatory burden” which included worries around National
Insurance, Business Rates, National Living Wage and the new
packaging tax (EPR). This was up over 20 percentage points from
January, when 62% of CFOs had it in their top 3 concerns.
As the largest private sector employer, offering huge numbers of
part-time and entry-level roles, the changes to the NI threshold
and National Living Wage have had a disproportionate impact on
both retailers and their supply chains, who together employ 5.7m
people across the country.
The Government has pledged to reform the broken business rate
system, reducing rates for some retail, hospitality and leisure
(RHL) outlets, by creating a new higher threshold for large
non-domestic properties, including 4,000 retail stores. These
large stores account for hundreds of thousands of retail jobs,
and play a vital role in attracting footfall to high streets and
other shopping destinations, benefitting smaller businesses
around them.
Helen Dickinson, Chief Executive at the BRC,
said:
“Retail was squarely in the firing line of the last Budget, with
the industry hit by £7 billion in new costs and taxes. Retailers
have done everything they can to shield their customers from
higher costs, but given their slim margins and the rising cost of
employing staff, price rises were inevitable. The consequences
are now being felt by households as many struggle to cope with
the rising cost of their weekly shop. It is up to the Chancellor
to decide whether to fan the flames of inflation, or to support
the everyday economy by backing the high street and the local
jobs they provide.
“Retail accounts for 5% of the economy yet currently pays 7.4% of
business taxes and a whopping 21% of all business rates. It is
vital the upcoming reforms offer a meaningful reduction in
retailers' rates bill, and ensures no store pays more as a result
of the changes. If instead, the Chancellor chooses to add further
costs to retailers and high streets, it will be the British
public who suffer from the knock-on impact on inflation.”
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CFO Survey:
CFO Survey took place between 19th June - 11th July and was
completed by CFOs and Finance Directors of BRC retail members,
whose businesses collectively employ over 300,000 people and
operate over 9,000 stores across the UK. The retail industry
directly accounts for 9% of employment in the UK, making it one
of the most important private sector employers in the country.
