Retail is a significant employer in the UK, with nearly three million individuals working in various roles within the industry, including shops, warehouses, transport, and headquarters. Among them, 365,000 are Usdaw members, representing a diverse range of workers from those needing flexibility to experienced retail employees who have advanced to managerial positions without formal qualifications.
When considering the broader supply chain, including farmers, drivers, warehouse staff, and service providers, it becomes evident that retail plays a central role in the everyday economy. However, the sector has faced challenges in recent years.
In the past decade, the retail industry has witnessed a loss of 350,000 jobs, with 100,000 of those losses occurring just in the last year. Additionally, over 10,000 shops closed their doors in the previous year, impacting not only individual livelihoods but also the vitality of local high streets.
In response to these challenges, the government has proposed a new permanent business rates reduction to support retail, hospitality, and leisure businesses. This initiative is long-awaited and essential to address the disproportionate burden faced by retail establishments, which contribute over 20% of all business rates despite only making up 5% of the economy.
To finance these rate reductions, the Treasury is considering raising business rates for large non-domestic properties, which could inadvertently affect larger retail stores, such as supermarkets, that are significant employers and key attractions for high street footfall.
Such increases in taxation could lead to reduced employee hours, more closed shops, and job losses, ultimately impacting prices for consumers. The additional financial strain on retailers may force them to raise prices, affecting working people who end up paying more at the checkout.
It is crucial to understand that larger stores cannot absorb increased costs indefinitely, as they already face rising expenses in various operational aspects, from energy to employee safety. Therefore, any tax changes must be carefully balanced to avoid further detrimental effects on the retail sector and the wider economy.
To ensure a fair and sustainable future for retail workers and businesses, the government should explore alternative approaches, such as excluding shops from higher business rates bands and adjusting rates for larger commercial properties with lower rates relative to their costs. This strategy would maintain revenue for the Treasury while minimizing adverse impacts on workers and prices.
Aiming for vibrant towns and cities, well-paid jobs, and thriving retail environments, stakeholders like Usdaw and the British Retail Consortium are eager to collaborate in shaping a positive future for the industry. The upcoming Autumn Budget presents an opportunity to prioritize the protection of shops and the individuals employed within them through meaningful and equitable business rates adjustments, fostering a conducive environment for growth and stability in the retail sector.