Retail Revolt: Small Shops Warn Chancellor—Cut Costs or Kill Growth

Small retailers can’t wait any longer for the changes they need in order to create the growth the Chancellor wants and needs. They stand willing but the Chancellor has to play her part.

Despite constant reminders that the Spring Statement wouldn’t be the occasion on which  changes and new measures were announced, small and micro businesses hoped that they would see signs that their needs were being recognised and understood. As it turned out that was a forlorn hope.

Retailers have already been hit by business rate increases, rising costs of hiring and are now dreading the impact of the employment rights changes coming soon. The British Retail Consortium (BRC) says business rates are undermining the viability of retailers on the high streets. They argue that although the Chancellor has made some efforts for fix the system it is broken and needs to be completely overhauled.

However, even if the business rates system were working well the costs of employing people are such that many of the small and micro businesses that dominate our high streets are cutting hours or reducing employee numbers and shelving recruitment. More than half of retail businesses have told the BRC that they are cutting hours and just under half have said they will cut jobs completely because of the costs.

We know that the hospitality sector too is being hit by employment costs. Between them the retail and hospitality sectors are our high streets. Without them what’s the point in going to the high street. They are also the training grounds for young people starting out in the workforce. Losing those entry level job opportunities is a disaster for the future of the workforce.

The Government wants firms to embrace technology and AI to increase productivity and growth, but in sectors where technology and AI are less useful, like retail and hospitality, it’s not the tech that’s causing the rise in unemployment and the drop in job vacancies. It’s costs that the Chancellor could choose to take steps to alleviate.

Retailers and Hospitality business owners want to pay well and recruit and few are suggesting that the Chancellor is wrong to put emphasis on growth but without reductions in costs to allow small and micro businesses to invest in people and technology there won’t be that growth for the foreseeable future and probably much longer.