Retailers slam Spring Statement for failing to address struggles

The Government’s Spring Statement has been criticised by retailers for not doing enough to address their concerns or support the sector.

The statement, delivered earlier today by chancellor Rachel Reeves confirmed there would be no further tax increases but provided no specific support for retailers and small businesses.

The chief executive of the Association of Convenience Stores (ACS), James Lowman, has warned that without increased government investment incentives, store closures and the loss of local services will become inevitable.

Rising costs and declining staff hours

According to the ACS, the cost increases retailers are expected to face in the coming year could total £666 million. These increases stem primarily from a rise in National Insurance contributions from 13.8% to 15% starting 1 April, a reduction in business rates relief, and a potential 18% increase in the National Living Wage.

Data from the latest Voice of Local Shops survey, which surveyed over 1,000 convenience store retailers across the UK, revealed a decline in net staff hours within the sector—marking the third-lowest since the survey began in 2012. Lowman noted that many businesses are already “cutting back” wherever possible to cover rising costs, adding that for many, there are no further cuts to be made.

He said: “The chancellor again stated today that promoting business investment is central to her strategy. She needs to look carefully at how increases in employment costs and business rates are in fact making it harder for businesses to invest.

“We will see store closures and with them the loss of essential local services unless the government provides more help through investment incentives, mitigations against growing employment costs, and more business rate relief.”

OPINION: Retailers braced for a perfect storm of cost rises

Financial burden raises ‘great concern’

Mo Razzaq, president of the Federation of Independent Retailers, expressed “great concern” about the additional financial burdens placed on businesses as a result of increased National Insurance contributions and National Living Wage increases.

He added: “Higher government costs come at a time when the overall economic outlook looks challenging, with growth underperforming, inflation ticking up, and government spending being taken away from the economy.

“Our members are key to the government’s growth agenda, which is the right goal, but this can only be achieved if we are able to afford to employ staff and help them learn and develop.”

Retailers need ‘immediate relief’

Charlotte Broadbent, UK general manager of the wholesale platform Faire, also voiced concerns that the government’s Spring Statement failed to address the real challenges facing retailers.

 She said: “We see first-hand how the thousands of independent retailers Faire works with are driving footfall to their local communities and encouraging shoppers to put their hands in their pockets with experiences and services that big box retailers can’t replicate.

“Small shops like these remain critical to retail’s future, but the reduction of the business rates discount and other rising costs are forcing them to be ever more resourceful with what money they have left to spend on stock and keep their businesses running.”

Broadbent also noted that while the government’s promise to lower permanent tax rates in retail, hospitality, and leisure from 2026/27 was “encouraging,” the sector urgently needs immediate relief.

“More support is desperately needed,” she said.

Colin Wilkinson, Scottish Licensed Trade Association managing director added: “There is nothing for the hospitality industry in the Spring Statement and our fear is that many businesses will be forced to restrict investment and growth as well as face the risk of job losses as the changes from April make many operators question if they are in a position to maintain current staffing levels.”

Read more ACS calls for lower business rates multiplier for small shops