Retailers have been left feeling pessimistic about trading conditions for 2025 as they prepare to increase prices in response to rising National Insurance costs, the British Retail Consortium has reported.

The trade committee surveyed 52 CFOs from leading retailers and only 13% said they were optimistic or very optimistic about trading conditions over the next 12 months.

The biggest concerns, which appeared in over 60% of respondents, were falling demand for goods and services, inflation for goods and services and the increasing tax and regulatory burden.

BRC chief executive Helen Dickinson said retailers are now facing “difficult decisions” about future investment, employment and pricing as they look to offset the £7bn added to their tax bills.

Over two-thirds of retail CFOs said they would raise prices to combat the increasing costs, while around half plan to reduce number of hours, head office headcount and stores headcount. Around 31% said the increased costs would lead to further automation.

Retailers also warned the Budget would impact on future investments, with 46% of CFOs saying they would reduce capital expenditure and 25% looking to delay new store openings.

Dickinson added: “Retailers have worked hard to shield their customers from higher costs, but with slow market growth and margins already stretched thin, it is inevitable that consumers will bear some of the burden.

“The majority of retailers have little choice but to raise prices in response to these increased costs, and food inflation is expected to rise steadily over the year. Local communities may find themselves with sparser high streets and fewer retail jobs available.

“Government can still take steps to shore up retail investment and confidence. Business rates remain the biggest roadblock to new shops and jobs, with retailers paying over a fifth of the total rates bill.

“The Government must confirm the planned reforms will make a meaningful difference to retailers’ bills and that no shop will end up paying more.”

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