Independent retailers have today (30) welcomed the government’s pledge to get tougher on retail crime, with an end to the £200 rule, more training for police and retailers and a clampdown on organised crime gangs announced in Chancellor Rachel Reeves’ first budget.
However, inflation busting rises to the minimum wage and a 1.2 per cent increase to 15 per cent in employers’ national insurance contributions means that hard-pressed independent retailers face a rough year ahead.
Responding to today’s budget, Mo Razzaq, the National President of the Federation of Independent Retailers (the Fed), 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, more bobbies on the beat and harsher punishments as shoplifting levels reach an all-time high, a new survey reveals.
A whopping ninety-one per cent of respondents called for more police patrols on streets, while a similar number - 90 per cent - said that shoplifters should be handed harsher sentences.
Commenting on the rises to the national minimum wage – the Chancellor announced that for adults over the age of 21, this will rise by 6.7 per cent to £12.21 per hour – Razzaq said, “Small independent retailers are the backbone of their communities. We provide employment and create jobs. In many cases, we give young people their first jobs.
"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.
“The only solution available to independent shop owners is to reduce staff hours and staff numbers and, somehow, take on even more hours ourselves.”
Younger workers will enjoy even larger increases, with the rates for those aged between 18 and 20 and those aged 16 to 17 rising by 16.3 per cent and 18 per cent, respectively.
Putting duty up by 10 per cent 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.”
The Chancellor’s announcement of a further freeze on fuel duty was welcomed, as was confirmation that the 75 per cent rate for retail, hospitality and leisure relief would be maintained and that the minimum secondary threshold for employers’ national insurance contributions would increase to balance the impact of the increase in the NLW on wage bills.
Razzaq concluded, “Small businesses play a vital contribution to their communities and to the economy, but with the cost of doing business soaring, many Fed members are struggling to stay in business. It is crucial that they are supported, so going forward, the government must put our concerns and our issues at the top of its agenda.”
