Costs are set to continue rising amid a difficult economic outlook following the Chancellor Rachel Reeves’ Spring Statement, which brought no significant change to major tax plans announced in the October budget despite urgent calls for support.
The Spring Statement released today (26) made no specific provisions for the independent retail sector, which is facing unprecedented challenges including rising business rates, an increase in employer national insurance contributions to 15 per cent above £5,000 per annum and an above-inflation increase in the minimum wage to £12.21.
With inflation set to rise faster than expected this year, the independent retailers associations continue to call on the Chancellor to reduce costs and for further action to tackle retail crime.
The Fed’s National President Mo Razzaq said, “The Fed is greatly concerned about impending higher costs from increases in employer national insurance contributions and above-inflation increases in the National Living Wage due in the coming days when the new financial year starts in April.
“Higher government costs come at a time when the overall economic outlook looks challenging, with growth under-performing, inflation ticking up and government spending being taken away from the economy.
“Our members are key to the government’s growth agenda, which is the right goal, but this can only be achieved if we are able to afford to employ staff and help them learn and develop.”
Similar sentiments were echoed by British Independent Retailers Association (Bira).
Andrew Goodacre, CEO of Bira, said, "While we welcome the Chancellor's focus on economic growth, we are deeply concerned that the Spring Statement has overlooked the immediate crisis facing independent retailers.
"Our members are confronting a perfect storm of rising costs – from the 140 per cent increase in business rates to the National Living Wage rise and National Insurance changes – all while consumer spending remains subdued.
"The Chancellor's forecasts of improved household income may offer some long-term optimism, but they do nothing to address the immediate cash flow challenges our members face. Many independent retailers are making difficult decisions right now about whether they can continue trading under these conditions."
Bira, which works with over 6,000 independent retailers across the country, had previously outlined three key priorities for the Chancellor to address: continued investment for town centres and high streets; fully funded policing to address retail crime; and making economic development a statutory requirement for local authorities.
Goodacre added, "We specifically called for continued investment in our high streets, proper funding to tackle retail crime, and a statutory requirement for local authorities to prioritise economic development. It's disappointing that Rachel Reeves has not responded to any of these crucial areas in her statement today.
"The Chancellor spoke about being 'impatient for change' and the British people being 'impatient for change' – our members are certainly impatient for meaningful support that recognises their vital contribution to local economies and communities."
While the Spring Statement predicts economic growth and improved household disposable income, with the OBR forecasting people will be "over £500 a year better off," Bira questions whether this will materialise quickly enough to help struggling retailers.
Goodacre further added, "Independent retailers are naturally resilient and optimistic, but even the most positive business owners are finding it difficult to maintain that outlook in the current climate.
"If the government truly wants to 'deliver prosperity for working people,' as the Chancellor stated, they must not forget the thousands of independent retailers who provide jobs and services in communities across Britain."
"We urge the Chancellor to reconsider her approach before the full Budget in the autumn and engage meaningfully with the independent retail sector to prevent further closures and job losses on our high streets."
