Faire: today's Budget "bitterly disappointing" for retail

Faire, the online wholesale marketplace has called today’s budget a disappointment for the retail sector.

Charlotte Broadbent, UK general manager at Faire, said: “Today’s Spring Statement was bitterly disappointing for the UK retail sector. The Government has let our high streets down by once again failing to address the many broken systems that are holding retailers back.

“Retailers were desperately hoping to see delays to planned business rate increases, which would have allowed them to invest more of their money into growing their businesses and, in turn, fuel stronger growth for the retail economy. However, woolly references to a generic ‘business rates support package’ have left them confused and unclear about what support is available and how it could tangibly aid their growth.

‘Likewise, the failure to address VAT-free shopping seems incredibly short-sighted. It has historically been a huge growth driver for the retail economy, encouraging consumers to spend more on big ticket items. With both the Olympics and the Euros on the horizon, the chance to stimulate high street spending was an open goal, and now goes down as an opportunity squandered.”

Martin Hamilton, director and retail sector specialist from leading consultancy and accountancy Menzies LLP, said: “The Spring Budget 2024 was a bit of a damp squib for the retail sector. The chancellor failed to address any major areas impacting the sector, which is likely to leave retailers continuing to struggle for the rest of 2024.

Whilst the government confirmed in the Autumn statement 2023 that a Business Rates discount of 75% for qualifying retailers would continue into the 2024/25 tax year, we had hoped that the government would switch from using the September 2023 CPI to the April 2024 projected CPI, which could save retailers a total of £1.92bn. However, nothing was specifically mentioned and therefore retailers should brace themselves for increased business rates, even with the discount, and build them into their forecasts going forwards.

The budget did confirm that National Insurance is again dropping by another 2p in the £1, therefore providing the public with more disposable income, which hopefully will provide a small boost to the sector.

Sadly, there was no mention of lowering Employers National Insurance for retailers, which would have been a huge boost to the sector. This was very much a budget for the people rather than for the business sector.

There was some good news for retail staff, in that they will soon be able to move their pension pots when they move jobs, in order to stop the confusing nature of potentially having multiple pensions pots. However, this will likely be an administrative burden for retailers, and may cost them more if they need to pay into multiple pension pots.

There was no mention to the National Living Wage, where we had hoped there was a consultation with the Low Pay Commission for a sustainable increase that aligns with broader economic conditions. Therefore the 9.8% increase remains in place for over 21s with higher increases for younger staff, which will increase retailers wages bills, and Employers NI liabilities.

In summary, there is nothing to really excite retailers, that they didn’t already know, so hopefully the economy continues to grow, and inflation continues to fall, to assist the retail sector for the rest of the year.”

Share This Article