BRC urges Osborne to cut retailers’ business costs
The British Retail Consortium has urged the Chancellor to use the Budget to help the struggling retail sector by introducing measures to cut costs and re-build fragile consumer confidence.
The call follows an independent study commissioned by the BRC, which shows that retailers’ operating costs have increased by a fifth since 2006 with centrally-driven costs rising the most rapidly.
The research found that the cost of doing business for retailers has increased by 21% since 2006, taking their annual operating costs from £96 billion to £116 billion. Over the same period retailers’ sales values increased by just 12%.
The study also shows that while many private sector, market-sensitive, costs such as rents have been held down in the recession, centrally-driven costs like business rates and utility bills have risen sharply.
Never Miss a Retail Update!In its submission to government ahead of next month’s Budget, the BRC is proposing that the Chancellor introduces measures to help restore consumer confidence and cut business costs to support jobs and growth.
The organisation is urging government to freeze Business Rates in April 2013, and to introduce the application of a ‘growth test’ to new regulation to stop growth-inhibiting regulation.
Other measures called for include the introduction of a time-limited National Insurance holiday for all companies which take on an unemployed young person and a ‘One in, Two Out’ approach to regulation to help cut bureaucracy. The BRC is also suggesting that the government speed up progress towards the target £10,000 per year personal tax allowance to help restore consumer confidence.
BRC director general Helen Dickinson said: “Retail is a major force for good. It’s the UK’s largest private sector jobs provider and has been a powerhouse for investment and growth, even during the relentlessly tough times of the last few years.
“There were welcome measures in the Autumn Statement and the Chancellor has it within his gift to do a great deal more. Our figures show dramatic increases in operating costs, often as a direct result of Government decisions.
“Consumer spending accounts for two thirds of all expenditure in the UK. It must recover before the economy can, yet 2013 has begun with high-profile evidence that demand is weak and a painful restructuring of the UK retail industry is underway as customers change the ways in which they want to shop.
“The Chancellor has the opportunity to improve the business environment as a way of re-establishing and maximising retail’s essential contribution to recovery. We’re setting out priorities to help achieve that most effectively.”
