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Chancellor Rachel Reeves delivered her second Budget today, prompting mixed reactions from the retail sector.<\/span><\/p>\n Reeves announced permanently lowered business rates for 750,000 retail, hospitality and leisure businesses, funded by higher rates for properties worth over \u00a3500,000 utilised by \u201cwarehouse giants\u201d.<\/span><\/p>\n While the customs duty relief on low value goods under \u00a3135 will also be scrapped from March 2029 at the latest, preventing online retailers from undercutting high street retail business prices.<\/span><\/p>\n Additionally, millions of low-paid workers will see a 4.1% pay rise next year, with the minimum wage increase\u00a0<\/span>hailed by Usdaw.<\/span><\/p>\n Retail Gazette rounds up the reactions from the retail industry below.<\/p>\n Co-op group CEO Shirine Khoury-Haq:<\/b> \u201cToday\u2019s Budget provides the clarity and certainty that small shops and local communities have been waiting for.\u00a0<\/span><\/p>\n \u201cThe government\u2019s decision on business rates is a welcome and important step that will help protect jobs, strengthen local economies and support high streets across the country.\u00a0<\/span><\/p>\n \u201cCo-op is stepping up alongside this commitment, facilitating over \u00a31bn of spend into the UK economy over the next year.\u00a0<\/span><\/p>\n \u201cThis includes our biggest ever number of price reductions to help with the cost of living, continued investment in British farmers and suppliers, and a focus on keeping high streets vibrant and safe.\u201d\u00a0<\/span><\/p>\n CBRE head of ratings Tim Attridge: <\/b>\u201cThe Chancellor\u2019s announcement on business rates is a welcome relief for some but not all.\u00a0<\/span><\/p>\n \u201cSmall businesses in the retail hospitality and leisure (RHL) sector are to benefit from permanently reduced rates whilst large retail portfolios on the high street and in the grocery sector will pay less in 2026 than in 2025.<\/span><\/p>\n \u201cOther sectors will fare less well as draft values for the business rates tax will be published in the next 24 hours. Privately owned infrastructure will see bills rise between 3-5 times with pass through costs to the consumer inevitable.\u201d<\/span><\/p>\n \u201cRetail businesses are still reeling from the huge economic pressures placed on them in the last Budget and have been dealing with a fall in sales in October due to dampened consumer confidence as shoppers awaited today\u2019s Budget.\u00a0<\/span><\/p>\n \u201cOur latest research has found 54% of retail workers are at risk of leaving their jobs and 44% are working while unwell due to the insecurity they and their employers face. Meanwhile 77% have told us they have experienced physical or verbal abuse this year, with 43% now coming under attack every week.\u00a0<\/span><\/p>\n \u201cRetail is the largest employer outside of the public sector, is a gateway to work for many people, and binds our communities and high streets together. This is something we forget at our peril, and our concern is that job insecurity among employees could rise and that shoppers\u2019 tensions will remain heightened over the coming months.\u201d<\/span><\/p>\n Usdaw general secretary Joanne Thomas: <\/b>\u201cToday\u2019s Budget shows that the government is serious about tackling child poverty, particularly for those in working households.\u00a0<\/span><\/p>\n \u201cAs one of the top seven wealthiest nations, it is unacceptable that millions of kids are growing up in poverty in the UK, with 7 in 10 of them in working households.\u00a0<\/span>That is a legacy of 14 years of Tory failure, which Labour is working to turn around.\u00a0<\/span><\/p>\n \u201cEnding the Tories\u2019 unfair two-child cap will help hundreds of thousands of children out of poverty.\u00a0<\/span><\/p>\n \u201cFurther action is already under consideration and Usdaw is participating in the Government\u2019s reviews of the universally discredited Universal Credit system along with parental leave and pay.\u00a0<\/span><\/p>\n \u201cAll these initiatives should make a real difference to working families, as will another significant increase in minimum wage rates, the continuing rollout of new free breakfast clubs, new nurseries in primary schools and doubling free childcare to 30 hours a week.\u201d<\/span><\/p>\n \u201cWhile these will be offset by longer-term indirect tax rises such as the freeze on income tax thresholds, in the short-term retail and hospitality businesses will hoping these measures bring spending momentum to what has been a slow start to the critical Golden Quarter in the run-up to Christmas.\u00a0<\/span><\/p>\n \u201cLonger term, the Budget does not allay many consumer-facing businesses\u2019 concerns about the cost of doing business.<\/span><\/p>\n \u201cWhile there has been no repeat of the employee NICs rises from last year, the 4.1% increase in National Living Wage and even higher 8.5% increase in minimum wage for 18-20 year olds particularly affect the workforces of the retail and hospitality sectors.\u00a0<\/span><\/p>\n \u201cWhile there will be reductions in business rates for smaller properties, the permanently higher multiplier for properties over \u00a3500,000 will affect larger stores, notably supermarkets and high street anchor stores, as well as warehouses.\u00a0<\/span><\/p>\n \u201cThis will inevitably put pressure on, for example, grocery prices that are already bucking the wider trend of lower inflation.\u201d<\/span><\/p>\n British Retail Consortium (BRC) CEO Helen Dickinson:<\/b> \u201cIt was a mixed bag Budget that offered relief for many shops, but brought in new costs for others.\u00a0<\/span><\/p>\n \u201cRetailers face a delicate balancing act as they strive to invest, hire, and keep prices affordable.\u00a0<\/span><\/p>\n \u201cThe announced permanent reduction in retail business rates is an important step to reduce the industry\u2019s burden from this broken tax. <\/span>Yet the decision to include larger retail premises in the new surtax does little to support retail investment and job creation.\u00a0<\/span><\/p>\n \u201cThe welcome plan to scrap the damaging de minimis loophole was weakened by a 2029 deadline.\u00a0<\/span><\/p>\n \u201cAnd while increases in the National Living Wage were in line with expectations, the rise to the minimum wage for under-21s could limit employment opportunities.\u00a0<\/span><\/p>\n \u201cAll in all, we will see winners and losers across retail and the impact for consumers will unfold in the coming months, but this Budget does not go far enough to mitigate the inflationary pressures already bearing down on the industry.\u201d<\/span><\/p>\n \u201cIGD expects food inflation to persist into 2027, with government policy contributing about a third of this pressure.<\/p>\n \u201cFood inflation will run ahead of overall inflation, making food relatively more expensive. Therefore, food shoppers will remain extremely cautious and reluctant to spend and the operating environment for food businesses will remain extremely difficult.<\/p>\n \u201cThe next few years will be characterised by weak volume growth and tight profits across retail and away from home.<\/p>\n \u201cIt\u2019s clear there\u2019s no immediate relief on the horizon for consumers or businesses. The increased taxation will slow volume growth which means less investment for the future resilience of the food system.<\/p>\n \u201cThere are opportunities for growth out there and targeted policy changes could unlock this, especially in horticulture and poultry.<\/p>\n \u201cThese changes could release \u00a35bn of investment and create 60,000 jobs, and that means genuine economic progress.\u201d<\/p>\n RSM UK head of retail Jacqui Baker: <\/strong>\u201cLevelling the playing field for UK retail seems to be a key theme in today\u2019s budget.<\/p>\n Rates reform is a positive step for the high street retailers, but the system still needs to strike a fair balance so larger operators and online businesses aren\u2019t disproportionately burdened.<\/p>\n \u201cIn addition, the Chancellor has closed the custom duty relief that allows small packages worth less than \u00a3135, into the UK without being charged import duties.<\/p>\n \u201cThis move could curb the flow of cheap goods flooding the market, but some care is required to ensure this doesn\u2019t create friction at the border.<\/p>\n \u201cThe biggest blow is the 8.5% rise in national minimum wage which will acutely hit retailers, applying more pressure to wage costs, which could ultimately trigger staff cuts as operators strive to balance the books.\u201d<\/p>\n MHA customs duty senior manager Andrew Thurston: <\/strong>\u201cIn a brief mention in today\u2019s Budget, Chancellor Rachel Reeves confirmed a major shift in UK customs policy: the government plans to scrap the duty de minimis waiver for goods under \u00a3135 by March 2029.<\/p>\n \u201cLow-value imports have soared, with HMRC data showing 1.6 million parcels arriving daily and the total value declared via the existing low value regime jumping from \u00a33.8bn to \u00a35.9bn in a year.<\/p>\n \u201cThe consultation proposes applying full customs tariffs, a possible admin fee, and replacing the existing process with a new dedicated system, with online marketplaces bearing responsibility for compliance and non-established sellers needing UK fiscal representatives.<\/p>\n \u201cFor consumers, the online shopping experience may stay the same, but costs will rise and the customs duty element will become more visible.<\/p>\n \u201cAs a result, the gap between online and high street prices will shrink, potentially encouraging shoppers to return to UK retailers. Gifts will remain exempt from duty.\u201d<\/p>\n Linda Ellett, Head of Consumer, Retail and Leisure for KPMG UK<\/strong>:\u00a0<\/span>\u201cMany retailers have long called for business rates reform, as the age of e-commerce grew and the cost of bricks and mortar retail rose.<\/p>\n \u201cRetailers will be diving into the detail of the changes announced today, with some set to gain and others set to lose, depending upon their respective rateable value.<\/p>\n \u201cThose losing, will at least, welcome the acknowledgement of impact in the shape of transitional relief and hopefully some permanency of the new arrangement.<\/p>\n \u201cUK-based online sellers will be more unanimous in their reaction to proposals to ensure that non-UK based online sellers don\u2019t continue to gain a competitive advantage by not having to pay customs duty.\u00a0 The key now will be how quickly the Government can make the change.\u201d<\/p>\n![\"Budget\"](\"https:\/\/www.retailgazette.co.uk\/wp-content\/uploads\/2021\/06\/Oxford-Street_Oxford-Circus_London_retail_streets_high-street_ST-3-696x464-1.jpg.webp)
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\n<\/picture>\nThe Retail Trust CEO Chris Brook-Carter: <\/b>\u201cIt remains to be seen whether today\u2019s Budget will do enough to reassure the UK retail industry ahead of the busiest shopping period of the year and amidst the ongoing uncertainty currently facing the sector from all sides.\u00a0<\/span><\/p>\n![\"Budget\"](\"https:\/\/www.retailgazette.co.uk\/wp-content\/uploads\/Online-shopping_ecommerce_generic_ST-5.jpg.webp)
\n<\/picture>\nPwC head of retail Jacqueline Windsor: <\/b>\u201cToday\u2019s Budget brought some respite for the 85% of consumers who have told us that they are concerned about the cost of living, with one-year freezes on fuel duty and rail fares and a short-term cut to energy bills being the biggest impacts.\u00a0<\/span><\/p>\n![\"Budget\"](\"https:\/\/www.retailgazette.co.uk\/wp-content\/uploads\/2024\/03\/Shutterstock_610869530.jpg.webp)
\n<\/picture>\nIGD chief economist James Walton: <\/strong>\u201cThis has been a tough Budget for shoppers, with government needing to raise significant sums of money, taking taxation to record levels.<\/p>\n