New post-Brexit import rules and business rates increases could undo recent progress to tackle inflation in the retail sector, leading figures from the sector have argued.
The British Retail Confederation (BRC) has warned that key measures in last week’s Autumn Statement would likely contribute further to the cost-of-living crisis, the Guardian reports.
Speaking to the Grocer, BRC CEO Helen Dickinson said:
“Retailers are committed to delivering an affordable Christmas for their customers.
“They face new headwinds in 2024 –from government-imposed increases in business rates bills, to the hidden costs of complying with new regulations.”
Brexit ‘red tape’
BRC also expressed concerns about the additional cost of post-Brexit labelling requirements and import checks, with key parts of the UK’s new Border Target Operating Model due to come into effect in January.
Adding to ongoing cost-of-living challenges, the body said it expects increased costs experienced by manufacturers and suppliers, as a result of the new rules, to be passed onto consumers.
Businesses from Great Britain are already dealing with new product labelling requirements for goods destined only for Northern Ireland under the Windsor Framework.
Autumn Statement contention
The BRC wrote to the chancellor in the lead up to last week’s Autumn Statement as part of a coalition of retail organisations calling for an extension of business rate relief.
Although this extension was delivered with Jeremy Hunt announcing a 75% business rate discount for retail, hospitality and leisure firms in England, the BRC objected to the way in which additional support, such as a freeze in the multiplier rate for small businesses, does little to support larger retailers.
In a statement published last week (22 November), it said the measures “[do] nothing for those retailers that provide the lion’s share of employment, investment, and low-cost essentials for customers” and called for broader business rate reform, so that retailers no longer pay what it considers a “disproportionate” share.
Inflation
The BRC reported that shop price inflation fell for the sixth month in a row to 4.3%, down from 5.2% in October. This reflects a substantial fall on last year’s October peak of 11.1%.
However, while CBI’s monthly retail sales figures, released yesterday (27 November), showed an improvement on October’s stats, it also showed a significant reduction in expected sales volumes for this time of year, when seasonal purchases typically offer a significant boost.
In the year to November, sales were down 11% on the previous year, compared to the 36% drop recorded for October. December looks set to continue this trend, with a fall of only 6% but the industry body still anticipates a disappointing Christmas.