The British Retail Consortium (BRC) has united a formidable coalition of retail leaders to implore the UK government to reconsider the imminent annual £400 million increase in business rates.
In a letter addressed to Chancellor Jeremy Hunt, signed by 44 influential retail leaders who collectively represent over a third of the retail industry’s workforce, the BRC is urging the government to «freeze the business rates multiplier, with an announcement expected in the upcoming Autumn Statement.»
Among the signatories are key figures from renowned companies such as Harvey Nichols, Deichmann, JoJo Maman Bébé, Schuh, Decathlon UK, Asda, Sainsbury’s, M&S, Tesco, and Mountain Warehouse.
The retail industry already contributes in excess of £7 billion annually in business rates. Without government intervention, the business rates multiplier is scheduled to increase in April 2024, aligned with an anticipated September inflation figure of over 6%. This would result in an annual hike of over £400 million in business rates for retailers. Such a substantial increase could exert upward pressure on prices, potentially counteracting the recent easing of shop price inflation.
The BRC underscores the concerns of its members through a recent survey, revealing that 68% of retailers are «very concerned» about the impending business rates increase. Retailers fear that it will place pressure on prices and disrupt their investment plans. The letter also underscores that retailers have been diligently working to absorb additional costs amid record cost inflation over the past 18 months, leading to significant contraction in operating profit margins. Despite these efforts, the rates rise could have adverse effects on the industry, potentially resulting in job losses and harming the economy.
Helen Dickinson, Chief Executive of the British Retail Consortium, highlights the far-reaching consequences of this rates increase. She emphasizes that it «will also cost jobs, harm the economy, and damage the vibrancy of our town and city centres.» Moreover, she underscores the unique nature of business rates, which must be paid in full, whether firms are making a profit or a loss. This distinctive characteristic makes business rates a decisive factor for retailers in determining whether to keep existing stores open or open new ones.