The letter, orchestrated by the British Retail Consortium, highlights the detrimental impact of a potential rise in business rates. The consortium warns that such an increase would pose a threat to the viability of numerous shops and impede the industry’s capacity to invest.
Notably, Tesco UK and Ireland’s CEO, Jason Tarry, as well as Sainsbury’s CEO, Simon Roberts, are among the retail executives who support this call.
The British Retail Consortium (BRC) further emphasizes that if the government fails to take action, the business rates multiplier will surge in April 2024, in accordance with the projected September inflation figure of over 6%. This surge would result in an annual rise of over £400m in retailers’ business rates bills, exacerbating pricing pressures within stores.
The letter also highlights potential global supply chain issues that could increase costs in the coming months. Factors such as Russia’s withdrawal from the Black Sea Grain Initiative, targeting of Ukrainian grain silos, restrictions on Indian rice exports, and ongoing labor market challenges contribute to this concern.
Against this backdrop, the consortium urges the government not to exacerbate the situation by significantly increasing the cost base. Freezing the business rates multiplier at its current level would effectively prevent this scenario, fostering stability for retailers.
Helen Dickinson, the BRC’s CEO, emphasizes the importance of freezing rates to mitigate the already substantial costs faced by retailers. Considering the recent easing of shop price inflation over the past three months, it is crucial that the government does not further burden businesses and undermine progress.
Aside from the financial strain, a £400m rates rise would inevitably lead to job losses, economic harm, and a decline in the vibrancy of town and city centers. Unlike other business taxes that fluctuate based on economic conditions, business rates remain a fixed obligation whether firms are profitable or incurring losses.
Ultimately, business rates dictate the difference between retailers being forced to close existing stores or being able to open new ones, thus directly impacting the growth and sustainability of the retail industry.