Chief executives from across the retail sector have called on Chancellor Phillip Hammond to present “a shoppers’ Budget” and stop “inexorable” rises in costs such as business rates.
The news comes as retailers prepare for the prospect of a £270 million leap in their bills from April due to business rates.
B&Q chief executive Christian Mazauric has said the impending increases in business rates “affects retailers’ ability to deliver value to customers”.
He said Hammon should take “a pragmatic approach to business rates reform that reflects the dynamic state of the retail sector, as well as mounting costs and economic uncertainty”.
Holland & Barrett boss Peter Aldis added retailers were already grappling with “profound changes”, which included changing shopping habits, consumers feeling the squeeze from stagnant wage growth and rising prices, and increasing costs to run a business.
READ MORE: Business rates relief expected in Budget
“Action in the Chancellor’s Budget to stop the inexorable cost rises and keep down the burden of business rates would increase retailers’ confidence about investing in new and refurbished shop premises, create jobs and help revive high streets and town centres,” Aldis said.
Meanwhile, Carpetright chief executive Wilf Walsh said the money spent on business rates “could be much better spent investing in the needs of our customers”.
“The prospect of further increases merely reinforce the need for rates to be capped in the year ahead and for a recasting of the rates system over the medium term so that it becomes modern, sustainable and fit for purpose in the 21st century,” he said.
The British Retail Consortium (BRC) has said that without reform on business rates, the cost increases will have an adverse impact on retailers’ investment plans.
Last month, the BRC made a Budget submission to Hammond which included a series of recommendations to support the retail industry in maximising its future contribution to the UK’s success during period of “profound change and uncertainty”.
One of the key recommendations included freezing the business rates multiplier in April 2018 – which would otherwise increase business rates bills and potentially divert £270 million of retail investment from delivering for consumers and away from local investment.
Business rates rises are set in line with the August Retail Price Index rate of inflation set by the Office for National Statistics. As a result, the rates are due to uprate by 3.9 per cent next spring.
However, the lower Consumer Prices Index (CPI), which sets inflation at three per cent, has been suggested by the BRC instead.
The BRC added that UK business rates are higher than anywhere in the OECD nations and were already a significant factor in discouraging local investment.
“As a priority, the retail industry wants to see decisive action to enable British businesses to continue to invest in the needs of their customers and communities by stemming the near four per cent increase in business rates planned for April 2018,” BRC chief executive Helen Dickinson said.
“This would be a positive first step towards a more financially sustainable and reformed rates system over the years ahead.”
Hammond will present the Budget on Wednesday.