Comment: Reactions to the budget from the retail sector
Here we give a round-up of reactions to today’s Autumn Budget statement.
Helen Dickinson, CEO of the British Retail Consortium
Changes to business rates from 2025
“While retailers welcome future action on rates, they are assessing the impact of today’s announcement. There remains many unanswered questions about the new charges and discounts that will be levied from 2026. Charging more to businesses with higher rateable values may punish not only distribution hubs, but also larger stores, which play a key role in attracting footfall to high streets and town centres.
“With retailers paying over 21% of all business rates in the economy, the solution is not to simply shift the burden around the industry, but to look outside retail. Without action to address the disproportionate impact of business rates on retail, the Government’s plan is simply robbing Peter to pay Paul.”
Retail hospitality and leisure relief changes
“While the extension of the RHL relief to small businesses in 2025/26 may provide support for some small shops across the country, it also represents a significant decrease from the current year. The measures will do nothing to help bigger brands that play such a key role in attracting shoppers and delivering investment for our high streets and town centres. Thriving shops of all sizes are essential to successful high streets to ensure breadth of choice, convenience and experience for customers.”
Employer National Insurance contribution rises
“Increases to National Insurance contributions are yet another case of piling taxes on an already overburdened industry – a decision which will reduce investment in shops and jobs. As a low-margin industry and the UK’s largest private sector employer, the scale of increases will have an immediate and disproportionate effect on both retailers and their supply chains, who together are responsible for employing 5.7m people across the country.”
Minimum wage rises
“Retailers strongly support the objective of higher wages and pay growth in the industry has outpaced the UK economy in eight of the last nine years. However, with retailers facing increases in costs from implementation of the Employment Rights Bill and National Insurance contributions, investment plans and economic growth will be impacted given the larger-than-expected increase to NLW. This adds £367m more than pre-Budget expectations.”
Retail crime
“We welcome the Chancellor’s firm stance on shoplifting, with the announcement on extra funding aimed at tackling a scourge that costs the industry over £1.8bn. This is on top of the scrapping of the low-level shoplifting threshold, which has resulted in many police forces ignoring smaller crimes. Working closely with the police and Government, retailers are determined to tackle retail crime – from shoplifting, to violence against retail workers.”
Chris Brook-Carter, CEO of retail industry charity Retail Trust
“Retail is the largest employer outside of the public sector so a healthy and happy retail workforce is important for our industry and for the country’s communities and high streets and its GDP.
“Yet right now, thousands of shop workers are contacting the Retail Trust to say they’re being forced to consider leaving a job they love and often have worked in for many years because they no longer feel safe there. We therefore welcome with open arms the new funding being announced to crack down on retail crime and provide more training to police officers to help better tackle this issue.”
“We’re also supportive of the government’s commitment to extend business rates relief and introduce permanent and lower rates from 2026 if it can help to give retailers more confidence to plan for the future to ease much of the uncertainty and insecurity currently facing everyone working in the industry.
“Increases to the national minimum wage and national living wage will also support many people across the retail sector by giving them the pay raise they deserve.
“And we fully agree with the Chancellor when she says that ‘healthy businesses depend on a healthy NHS’, and hope that new NHS funding will help address the declining levels of mental health we are seeing amongst the retail workers the Retail Trust supports, particularly the sector’s youngest workers who we’ve found are most likely to be taking time off or working whilst unwell.
“However, while we recognise that the need to raise more money to fund these vital NHS services comes with some difficult decisions, we echo the concerns from some in the retail sector about the long-term impact of increased National Insurance Contributions on both employers and their staff.”
“Retailers are counting the cost of today’s Budget: over £2.3bn in increases to employer National Insurance contributions; £367m due to the larger-than-expected rise to the National Living Wage; and a £140m hike to next April’s business rates. These costs come into effect from April next year and are on top of other upcoming regulatory costs and an estimated £300-800m of extra costs from the implementation of the Employment Rights Bill.
“Retail employs three million people and 2.7 million more across supply chains, driving investment in jobs, communities and, ultimately, economic growth, right across the country. For a low margin industry, today’s Budget will hit hard, with the odds now stacked firmly against growth and investment in the short term. These new costs also risk increasing the prices customers pay at the till.
“As the industry prepares for over £2.5bn in new costs in 2025, improvements to the business rates system will not come until 2026. We welcome the recognition that retail, along with hospitality businesses, should pay lower rates. But with the detail still to be worked through, it is unclear whether this will address an imbalance which sees retail, as 5% of the economy, pay 21% of the total business rates bill. In order to stimulate investment, it is vital these changes reduce the overall costs on the industry, rather than simply shifting the burden from one part to another.”
Charlotte Broadbent, UK general manager of Faire
“We welcome the Chancellor’s commitment to easing the pressures on the UK high street and on small businesses, and it’s a relief for retailers that this budget has taken some action on extending the business rates discount for retailers beyond April next year and freezing the tax multiplier. But reducing the rates discount from 75% to 40% will still mean a steep increase for them next year, at a time when many are already facing significant financial challenges.
“Permanent lower tax rates on retail, hospitality, and leisure properties from 2026-27 are promising, but proof will be in the detail and immediate relief is essential to keep high streets resilient in the face of economic pressures.
“We’re also supportive of raising the employment allowance, which should come directly off every small employers’ National Insurance bill next year.
“At Faire, we remain committed to supporting our community of over 50,000 independent retailers in the UK through these challenging times, by offering tools and solutions to help with financing, managing costs and growing sales.”
Andrew Goodacre, CEO of the British Independent Retailers Association
“This is without doubt the worst Budget for independent retailers I have seen in my time representing the sector. The government’s actions today show complete disregard for the thousands of hard-working shop owners who form the backbone of our high streets.
“Small retailers, who have already endured years of challenging trading conditions, now face a perfect storm of crippling cost increases. Their business rates will more than double as relief drops from 75% to 40%, while they’re hit simultaneously with employer National Insurance rising to 15% and a lower threshold of £5,000, down from £9,100. Add to this the minimum wage increase to £12.21, and many of our members are telling us they simply cannot survive this onslaught.
“One member has already calculated these changes will increase their cost base by £150,000 next year alone.
Goodacre added: “For all the government’s rhetoric about supporting small businesses and revitalising high streets, their actions do precisely the opposite. These punishing measures will force many shop owners to make heart-breaking decisions about their businesses’ future.
“What makes this particularly bitter is that these are family businesses, often built up over generations, run by people who work incredibly long hours to serve their communities. They’re now being asked to shoulder an impossible burden while trying to compete with online giants who face none of these cost pressures.
“This is clearly an anti-high street Budget. I can only assume that the government is happy for working people to shop online and buy cheap imports. This government has shown complete disregard for the local businesses that create jobs and maintain vibrant communities.
“This Budget betrays every independent retailer who has fought to keep their business alive through recent challenges. It’s not just disappointing – it’s potentially catastrophic for Britain’s high streets.”
Michelle Buxton, REVO board member
“Sadly the Chancellor’s announcement has made things worse for retail and leisure businesses with many reliant on the 75% business rates relief. With this now reduced to 40% and with minimum wage and national insurance contributions increasing while the multiplier remains static, or is set to increase, cost increasing will be painful for those in the retail and leisure sector. Although we welcome the promise of a business rates discount for retail from 2026, it is kicking the can down the road and does little to encourage investment and innovation across the retail and leisure sector, in line with the government’s growth agenda.
“Revo’s recently released Future Insights found that a thriving retail and leisure sector had the potential to unlock economic growth across the UK. Meanwhile, a recent joint study between Revo and Lambert Smith Hampton found that 71% of people believed business rates reform was the most useful government intervention to support town centres. However, by failing to go further to address this major barrier to entry for those seeking to support the retail and leisure sector, this Budget announcement has missed the chance to secure increased investment which would have created safe and thriving communities and led to economic prosperity across the UK.”
