Representatives of UK's convenience sector as well as those of independent retailers have heavily criticised Chancellor Rachel Reeves for ignoring the pleas of retail in her Spring Statement, thus pushing some local store operators towards closure.
Delivering the Spring Statement today (26), Reeves did not budge in reduction in business rate relief, National Insurance hike and in minimum wages.
She said she will stick to her cast-iron “fiscal rules” and blames the Liz Truss mini-budget for pushing up borrowing rates and harming “ordinary working people” two years on.
The Association of Convenience Stores has responded to the Chancellor's Spring Statement, warning that the impact of the Government's tax increases on retailers is already being felt, with more challenging conditions to come.
ACS chief executive James Lowman said, “The Chancellor again stated today that promoting business investment is central to her strategy.
"She needs to look carefully at how increases in employment costs and business rates are in fact making it harder for businesses to invest, because at the moment our members are cutting back wherever they can to cover the additional costs hitting their businesses from next week.”
Figures from the latest Voice of Local Shops survey of over 1,000 convenience store retailers across the UK have shown that there has been a sharp decline in net staff hours in the sector - the third lowest on record since the start of the survey in 2012.
Lowman continued, “As the cost of employing colleagues rises, local shop operators are already reducing staff hours in their stores.
"For many businesses, there are no further staffing cuts to be made.
"We will see store closures and with them the loss of essential local services unless the government provides more help through investment incentives, mitigations against growing employment costs. and more business rate relief.”
After the Autumn Budget, ACS estimated that cost increases would amount to over £666m in the coming year without taking into account the additional burdens and costs of new regulations.
"This is the result of the reduction in business rates relief, the increase in employer National Insurance Contributions, and the increases in the National Living Wage rates.
Chris Brook-Carter, chief executive of retail industry charity the Retail Trust, said, “We know many retailers and retail workers have been facing an uncertain future following some of the tax rises announced in the autumn budget and today’s spring statement will have done little to alleviate their concerns.
“The number of redundancies from the sector last year was the highest since the pandemic and more retail businesses will be forced to make difficult decisions this year as they grapple with increased national insurance contributions, minimum wage rises and the reduction in business rates relief from next month.
“We see this reflected in declining wellbeing across our industry and a rise in the number of people reaching out to the Retail Trust for help. We stand ready to offer even more support to retail workers in the coming months and to assist more employers looking for help on how to manage this uncertainty amongst their staff.”
Online wholesale Faire has also criticised the Labour government for failing local and independent stores.
Charlotte Broadbent, UK general manager at wholesale platform Faire, said, “The government should be focused on helping retailers to innovate, adapt, and create spaces that bring our sometime gap-toothed high streets to life. But today’s Spring Statement failed to address any of the challenges facing the retail sector right now.
“We see first-hand how the thousands of independent retailers Faire works with are driving footfall to their local communities and encouraging shoppers to put their hands in their pockets with experiences and services that big box retailers can’t replicate.
"Small shops like these remain critical to retail’s future but the reduction of the business rates discount and other risings costs are forcing them to be ever more resourceful with what money they have left to spend on stock and keep their businesses running.
“We remain hopeful that Labour will still eventually honour its manifesto commitment to replace business rates with a fairer system that better reflects current economic conditions and addresses the unfair burden it is placing on high street businesses of all shapes and sizes.
"The government's promise for permanent lower tax rates on retail, hospitality, and leisure properties from 2026-27 is more encouraging, but proof will still be in the detail and more urgent relief is desperately needed.
"In the meantime, Faire will remain committed to helping our huge community of thousands of independent retailers in the UK be agile, with innovative digital tools and solutions to help with finding and financing amazing products, managing costs and growing their sales.”
