The 2024 Budget has stirred significant responses across the grocery industry.
- Business rates will see a permanent reduction for retail, but concerns about potential disparities remain.
- Retail crime measures have been introduced to tackle shoplifting and organized crime more effectively.
- Rising National Insurance contributions and changes in Living Wage pose challenges for retailers.
- Increases in alcohol duties have been criticized by the wine and spirits sector.
Chancellor Rachel Reeves’ recent Budget announcement has invoked varied reactions within the grocery sector. Significant changes include adjustments to business rates and taxes on goods like tobacco and alcohol. The move to permanently reduce business rates for retail properties from 2026/27 is welcomed by many, yet concerns persist regarding its execution. The retail and hospitality rate relief reduction from 75% to 40% and the freeze on the small business multiplier raise questions about the impact on larger stores. As per the British Retail Consortium, further clarification is essential to avoid undue burden on high-value properties.
The government’s commitment to tackling retail crime has been met with cautious optimism. Plans to scrap immunity for low-value shoplifting and fund efforts against organized crime align with long-standing demands from retailers. Notably, this initiative comes amidst growing concerns about the safety and security of retail workers and the financial strain of shoplifting on businesses. James Lowman from the Association of Convenience Stores highlights the necessity of action to support these legislative intentions, ensuring crimes against retailers and their staff are properly addressed.
National Insurance contributions will rise to 15% in 2025, prompting worries about increased costs for an already strained retail sector. With employment taxes set to rise and thresholds for contributions lowered, retailers brace for reduced investments and potential job impacts. The British Retail Consortium has expressed concern over the disproportionate effects on the industry and the potential hindrance to economic recovery.
The rise in the National Living Wage to $12.21 an hour for those over 21, while seen as a positive step for employees, presents financial challenges for employers. The Co-op’s Shirine Khoury-Haq emphasizes the need for further government reforms to unify age rates within the National Living Wage framework, reflecting on Co-op’s practice of fair pay.
In the alcohol sector, the increase in duties has sparked criticism, particularly from wine and spirits stakeholders. The Wine and Spirit Trade Association highlights the detrimental impact on both companies and consumers. They argue that such measures counteract the government’s growth promises and escalate economic burdens. Scottish Whisky representatives reiterate the negative consequences for the industry and call for legislative reconsideration.
The 2024 Budget presents a mixed bag of opportunities and challenges for the grocery industry, requiring careful navigation and adaptation.
