Retail sector Budget reaction “Support still missing for struggling businesses”
The retail community has responded with disappointment and concern following today’s Spring Statement, warning that a lack of immediate relief will heap further pressure on an already stretched sector.
While the Chancellor reiterated a commitment to growth and reducing economic inactivity, many industry leaders say the measures outlined fall short of what’s needed to support businesses through rising costs and ongoing economic uncertainty.
Spring statement 2025: At-a-glance
Chancellor Rachel Reeves’ Spring budget highlights:
-
No changes to income tax or National Insurance
Despite pressure, Reeves stuck to existing tax plans. Employer NI contributions will still rise to 15% above £5,000 from April. -
Minimum Wage increase confirmed
National Living Wage will rise to £12.21/hour – an above-inflation hike. -
Reduction in business rates relief
Retail, hospitality and leisure businesses will see less relief from April, with promises of a reformed two-tier system by 2026-27. -
No return of VAT-free shopping for tourists
Retailers continue to push for its reinstatement, but it was not addressed in the statement. -
No new support for energy bills or inflation-linked pressures
Despite a tough cost-of-living outlook, no further subsidies or inflation relief were announced. -
Focus on growth and getting people back to work
Reeves reiterated ambitions to cut economic inactivity, but without specific measures targeted at the retail workforce.
Mounting Pressures, Unclear Policy
Helen Dickinson, Chief Executive of the British Retail Consortium, cautioned that without clarity and support, retailers will face tough decisions in the coming months.
“The Chancellor has committed to tearing down regulatory barriers, but retailers are grappling with £7bn in new costs this year alone,” she said. “That means higher prices, fewer shops and less investment in jobs.” She warned that without urgent clarity on the Employment Rights Bill and business rates reform, progress on job creation and economic inclusion could be undermined.
Rising Costs, Declining Wellbeing
Chris Brook-Carter, Chief Executive of the Retail Trust, echoed those concerns, highlighting the human toll of financial pressures.
“Redundancies in retail were the highest since the pandemic last year, and more businesses are likely to follow suit,” he said. “We’re already seeing a rise in people reaching out to the Retail Trust for support. This statement will have done little to ease their concerns.”
Independent Retailers Feeling the Squeeze
Independent retailers also raised alarm bells. Charlotte Broadbent, UK General Manager at wholesale platform Faire, said: “Today’s Spring Statement failed to address the challenges facing the retail sector right now. Small shops are the heartbeat of local communities, but cuts to business rates relief and rising costs are making it harder for them to survive.”
She called for a renewed commitment to business rates reform and praised Labour’s pledge to overhaul the system if elected. “Proof will be in the detail, but independent retailers need urgent relief, not just long-term promises,” she added.
The Fed: Growth Agenda at Risk
The Federation of Independent Retailers (the Fed) also flagged the risk of higher costs derailing the government’s growth plans. “Our members want to contribute to growth, but we can only do that if we can afford to employ staff and invest in their development,” said National President Mo Razzaq. “Instead, we’re facing increased NI contributions and above-inflation wage rises at a time of weak growth and rising inflation.”
Tax and Business Environment Still Unsettled
Tax experts from EY and Forvis Mazars added that the lack of new announcements doesn’t mean businesses are off the hook.
Laura Mair of EY pointed to ongoing geopolitical and tax policy uncertainty: “Businesses need a long-term tax strategy and direction. Without it, the UK risks losing its appeal as a safe, stable investment destination.”
Matt Dalton, Consumer Sector Leader at Forvis Mazars, said many in the sector had hoped for “much-needed relief” from employer NI and business rates pressures. “Retailers are being forced to raise prices, which undermines the intent of helping consumers. Small businesses are struggling now — they can’t afford to wait until 2026 for lower tax rates.”
Call for Urgent Action on Flagship High Streets
Dee Corsi, Chief Executive of the New West End Company, warned of devastating consequences for the UK’s high streets. “There’s an urgent need for holistic policies to reduce business burdens. Without action on business rates and tax-free shopping, flagship retail destinations like the West End will lose competitiveness and investment.”
Industry United in Concern
Across the board, voices from large retailers, independent shops, industry bodies and tax experts are aligned in their message: the Spring Statement offers little in the way of immediate help. As rising costs threaten the future of jobs, investment, and wellbeing in the sector, the retail community is urging government to act swiftly to avoid unintended consequences — and ensure the sector can remain a vital engine of growth in the UK economy.
