Multiples and independents are calling for business rate relief and a focus on boosting consumer confidence from the upcoming autumn Budget to help counteract tough trade on the high street.
As rising costs and the weakness of sterling continue to squeeze margins, retailers are hoping for support from chancellor Philip Hammond when he unveils his Budget on 22 November.
Business rates are a top priority for large and small retailers alike and a rumoured halt to the 3.9% rise to rates next April would be welcomed by all, said Helen Dickinson, chief executive of the British Retail Consortium: “At a time of uncertainty for both the economy and the country, it’s important we set ourselves up for success.
“The cumulative burden of government-imposed costs has become acute. Inflation figures mean retailers are faced with a £270m leap in business rates alone next spring.
“Retailers want to help build the confidence of their customers, not damage it. But to do this they need the support of government policy that keeps down the cost of living, not exacerbates it.”
Fat Face chief executive Anthony Thompson agreed that business rates need to be addressed: “[Previous] Budgets have focused on a structure organised around one channel – physical space – whereas retailers are mostly multichannel. Until the government recognises the way rents work across retail, [the Budget] will continue to be distracted by other political issues.”
Damian Hopkins, international director at Matalan, said: “From a retail perspective we need to see some help from the Budget both for households and businesses. Retailers’ costs continue to rise not only because of the fall in the value of sterling, but also increases in labour costs, rents and the proposed increase in business rates planned for next April.
“I’m sure all retailers would warmly welcome Hammond dropping the planned 4% rise in business rates next year.”
Steve Cochrane, owner of Middlesbrough-based designer store Psyche, said business rates are “out of kilter” from where they should be: “The last budget lacked substance. My biggest issue this year is rates, though I can’t see it being mentioned in the budget. For my shopping centre store, we’re paying £85,000 in rates and £34,000 in rent, while in most areas rates are half their rent.
“I’d like to see it go back to how it was years ago – most landlords are commercial and have reduced rents in line with footfall, while the Valuation Office Agency is still basing rates on pre-recession days and it’s crazy.”
Clare Mclennan, joint managing director and owner of Monmouth-based womenswear independent The Square, echoed this, saying she wanted the government to “help alleviate” the pressure on retailers and encourage consumer confidence: “The Budget needs to focus on how the UK economy will be boosted. There need to be financial incentives for businesses to survive. There should be grants and interest-free loans, and business rate increases need to be gradually phased in.”
Debbie Hewitt, chairman of Moss Bros, said: “We’ve had so much uncertainty in recent times, so anything that can give the consumer confidence would be a great outcome for us retailers. This could be through VAT incentives, for example. The government needs to give people reasons to feel confident about spending.”
A chief financial officer at a lifestyle multiple said: “I’d like to see a balanced Budget that’s friendly to both consumers and retailers. Business rates, increasing pension costs and growing national wages have been quite a squeeze on margins for retailers, so if the government wants the retail sector to grow, it needs to help it through tough times.”
- What should the chancellor do to help the fashion retail industry with his Budget next week? Email us at email@example.com