Following today's Spring Statement, retail organisations are urging the Government to prioritise measures that encourage business growth and investment in the UK, as significant cost increases loom ahead of the incoming Autumn Budget measures.
Chancellor Rachel Reeves used her Spring Statement to announce a series of public spending cuts in order to balance the books without raising taxes.
It comes as businesses prepare to be squeezed by higher taxes and employment costs from April, as a result of the Autumn Budget.
Today's statement to the Commons was not intended to be as significant as a Budget, as the Chancellor has promised to only make one major fiscal intervention a year in order to provide stability for businesses and consumers.
Reeves revealed that the Office for Budget Responsibility (OBR) has halved its growth forecasts for 2025 to 1%. She also attributed much of the UK’s economic woes on "increased global uncertainty".
Her warnings about a world "that is changing before our eyes" was largely directed at the economic impact of war in Ukraine.
However, this warning could also be interpreted as a signal that Donald Trump’s tariffs on all imports to America will hit the British economy.
Here's what the retail industry thinks...
Helen Dickinson, CEO of the British Retail Consortium
"The Chancellor has committed to tearing down regulatory barriers and implementing policies to grow our economy and create jobs. And yet retailers are facing tough choices as they try to find ways to address the £7 billion in new costs this year as a result of increased employer NICs, higher NLW, and the new packaging tax. The impact of this will be higher prices, fewer shops and less investment in jobs.
"We welcome the Chancellor’s commitment to 'drive growth in the economy' and the retail industry is keen to play its part in this mission. As the Chancellor aims to drive down the number of those who are 'economically inactive', there is a need for better routes back into work for those that want or need it after a period of inactivity. The retail industry provides a perfect solution. It is filled with people joining and returning to the workforce. It offers local, flexible jobs, often requiring few qualifications, and part-time jobs that allow people to find their feet, work as much or as little as they are able, and balance work with other important life commitments.
"But the costs from the Budget, and uncertainty about how the Employment Rights Bill and new business rates policy will be implemented, mean it will be much harder for retailers to keep creating these kinds of jobs. So the Government should avoid unintended consequences and provide clarity about the implementation of these policies as soon as possible. A serious plan for retail growth would support the industry to invest in new jobs and keep prices down for customers."
Chris Brook-Carter, CEO of the Retail Trust
"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."
Dee Corsi, CEO of New West End Company
"Today’s Spring Statement underscores the harsh reality; that the UK’s economic outlook remains challenging and the support many businesses urgently need is still missing.
"While we welcome Government action to support growth through initiatives like the recent Planning and Infrastructure Bill, for businesses on flagship high streets like those we represent in the West End, there’s an urgent need for more holistic policies to reduce the burdens they face.
"Key to this is the looming hike in business rates, which is a major barrier to the Government’s growth agenda, threatening to hit retail, hospitality, and leisure businesses hardest, with potentially devastating consequences. Just as important is the continued absence of tax-free shopping, which cost West End businesses £640 million last year, hampering the UK’s global competitiveness and stalling any growth potential.
"We urge the Government to reconsider their proposed reforms to protect businesses on flagship UK high streets, attract inward investment, and support national and local growth."
Charlotte Broadbent, UK General Manager at wholesale platform Faire
"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."
