Responding to today's Budget announcements, Helen
Dickinson, Chief Executive of the BRC, said:
“Retailers are counting the cost of today's Budget: over £2.3bn
in increases to employer National Insurance contributions; £367m
due to the larger-than-expected rise to the National Living Wage;
and a £140m hike to next April's business rates. These costs come
into effect from April next year and are on top of other upcoming
regulatory costs and an estimated £300-800m of extra costs from
the implementation of the Employment Rights Bill.
“Retail employs three million people and 2.7 million more across
supply chains, driving investment in jobs, communities and,
ultimately, economic growth, right across the country. For a low
margin industry, today's Budget will hit hard, with the odds now
stacked firmly against growth and investment in the short term.
These new costs also risk increasing the prices customers pay at
the till.
“As the industry prepares for over £2.5bn in new costs in 2025,
improvements to the business rates system will not come until
2026. We welcome the recognition that retail, along with
hospitality businesses, should pay lower rates. But with the
detail still to be worked through, it is unclear whether this
will address an imbalance which sees retail, as 5% of the
economy, pay 21% of the total business rates bill. In order to
stimulate investment, it is vital these changes reduce the
overall costs on the industry, rather than simply shifting the
burden from one part to another.”
CHANGES TO BUSINESS RATES FROM 2026:
“While retailers welcome future action on rates, they are
assessing the impact of today's announcement. There remain many
unanswered questions about the new charges and discounts that
will be levied from 2026. Charging more to businesses with higher
rateable values may punish not only distribution hubs, but also
larger stores, which play a key role in attracting footfall to
high streets and town centres.
“With retailers paying over 21% of all business rates in the
economy, the solution is not to simply shift the burden around,
but to look outside retail to address the disproportionate impact
of business rates on the industry.”
RETAIL HOSPITALITY AND LEISURE RELIEF CHANGES:
“While the extension of the RHL relief to small businesses in
2025/26 may provide support for some small shops across the
country, it also represents a significant decrease from the
current year. The measures will do nothing to help bigger brands
that play such a key role in attracting shoppers and delivering
investment for our high streets and town centres. Thriving shops
of all sizes are essential to successful high streets to ensure
breadth of choice, convenience and experience for customers.”
EMPLOYER NATIONAL INSURANCE CONTRIBUTION RISES:
“Increases to National Insurance contributions are yet another
case of piling taxes on an already overburdened industry – a
decision which will reduce investment in shops and jobs. As a
low-margin industry and the UK's largest private sector employer,
the scale of increases will have an immediate and
disproportionate effect on both retailers and their supply
chains, who together are responsible for employing 5.7m people
across the country.”
ON MINIMUM WAGE RISES:
“Retailers strongly support the objective of
higher wages and pay growth in the industry has outpaced the UK
economy in eight of the last nine years. However, with retailers
facing increases in costs from implementation of the Employment
Rights Bill and National Insurance contributions, investment
plans and economic growth will be impacted given the
larger-than-expected increase to NLW. This adds £367m more than
pre-Budget expectations.”
RETAIL CRIME:
“We welcome the Chancellor's firm stance on shoplifting, with the
announcement on extra funding aimed at tackling a scourge that
costs the industry over £1.8bn. This is on top of the scrapping
of the low-level shoplifting threshold, which has resulted in
many police forces ignoring smaller crimes. Working closely with
the police and Government, retailers are determined to tackle
retail crime – from shoplifting, to violence against retail
workers.”
