Act now, or prices will keep on rising. That’s the message from the British Retail Consortium (BRC) to Chancellor John Healey ahead of tomorrow’s Autumn Budget.
The warning comes as the latest figures from the BRC and NielsenIQ (NIQ) show shop price inflation rose to 2.1% in October, up from 1.4% in September.
The BRC’s CEO Helen Dickinson said: “Retailers cannot endlessly swallow higher business rates, employment costs, energy bills, and packaging taxes. Without a change of course, October’s jump in inflation is only the beginning.
She added: “Our recipe for the Chancellor is simple. Slash employment costs. Cancel the 3.5% business rates increase. Remove shops from the high-value surtax. Otherwise, households will end up paying the price.”
British retail businesses in financial distress
The Budget comes as new data from BTG reveals that financial distress has hit a 20-year high – currently experienced by 738,000 British businesses. Meanwhile, 86% of small businesses believe the Budget could cause further damage to their finances and growth prospects, according to research from Novuna Business Finance.
Jacyn Heavens, CEO of Epos Now, said: “Every day we see what running a small business in the UK really looks like right now. It’s the café owner opening up at 6am and doing the books at midnight. It’s the shopkeeper skipping their own wage so they can pay their staff on time.
“These aren’t faceless businesses. They’re the people who know their customers by name, sponsor the local football team and give young people their first job. And right now, many of them are exhausted. Wages, National Insurance, energy and business rates have all gone up, and there’s simply nowhere left to absorb it.”
Breathing space needed
Heavens hopes the Budget will offer relief for these businesses. “A real rise in the Small Business Rates Relief threshold and a cut to hospitality VAT would give business owners the breathing space to keep their doors open, keep their teams together and plan for the future with some confidence,” she said. “Our high streets don’t survive on their own. They survive because of these people, and it’s time they were backed by the government.”
A Budget that raises costs without offering relief risks turning today’s inflation warning into tomorrow’s price tag. With financial distress already at record levels, retailers argue the question is no longer whether costs will be passed on, but how much consumers will end up paying. The Chancellor’s choices this week may determine whether shops can invest in growth or simply fight to stand still.
Stay informed
Our editor carefully curates two newsletters a week filled with up-to-date news, analysis and research. Click here to subscribe to the FREE newsletter sent straight to your inbox. Why not follow us on LinkedIn to receive the latest updates on our research and analysis?
