The nature of the ecosystem on Britain’s high streets means that every retailer in every sector are interdependent. The common currency is footfall and anything which undermines that risks the very future of the high street.
MERKUR UK General Manager Sascha Blodau has highlighted the ‘dire consequences’ facing Britain’s high streets should Chancellor Rachel Reeves raise business taxes in her Autumn Budget.
Speaking following new polling from the British Retail Consortium (BRC) which showed significant concern among retail finance chiefs who say government policy is driving up inflation and forcing brands to close stores Blodau said: “Iceland, Poundland and New Look were among major retailers to announce store closures in recent months, amid business warnings over the impact of tax rises in the chancellor’s first budget.
“People want to see a successful town centre and empty or boarded-up shops simply kill the high street. Retailers whether they are part of the leisure and pleasure sector such as AGCs, or if they are banks, building societies or supermarkets are all part of the same joined-up retail ecosystem. We depend on footfall and anything that undermines vibrancy and impacts visitation is extremely damaging for business.”
The BRC survey of Chief Financial Officers (CFOs) and Finance Directors representing over 9,000 stores painted a worrying picture with 56 percent describing their feelings about trading conditions over the next 12-months as “pessimistic”.
When asked about the consequences of the last Budget, which saw huge increases to employer National Insurance and National Living Wage, 85 percent of CFOs said their businesses had been forced to raise prices, with two-thirds (65 percent) predicting further rises in the coming year.
Jobs were also at risk: 42 percent of CFOs said they had frozen recruitment, while 38 percent said they had reduced job numbers in-store.
This was reflected in the official job figures, with almost 100,000 fewer retail jobs in the first quarter of 2025 compared to the previous year.
Investment in local communities has also suffered. 38 percent of CFOs suggested they had reduced investment, while one in six (15 percent) had already delayed opening new stores.
The biggest financial fear – which appeared in almost 9 out of 10 CFOs “top three concerns for their business” was the “Tax and regulatory burden” which included worries around National Insurance, Business Rates, National Living Wage and the new packaging tax (EPR). This was up over 20 percentage points from January, when 62 percent of CFOs had it in their top three concerns.
As the largest private sector employer, offering huge numbers of part-time and entry-level roles, the changes to the NI threshold and National Living Wage have had a disproportionate impact on both retailers and their supply chains, who together employ 5.7m people across the country.
Underlining the challenge facing the high street, Blodau confirmed: “Large stores not only account for hundreds of thousands of retail jobs, but they also play a vital role in attracting footfall to high street destinations, in the process benefitting the entire ecosystem.
“There are fewer AGCs on the high street than pre-Covid and £300m less is being spent/year on machines. Unlike our neighbours on the high street AGCs cannot increase their prices and it’s clear that the sector would be disproportionately damaged by any increase in business taxes which would have to come-off the bottom line.”
BRC Findings
• 56 percent “pessimistic” about trading conditions over the next 12-months
• 9 out of 10 CFOs cited “Tax and regulatory burden” in its top three major concerns
• 85 percent of CFOs said their businesses had been forced to raise prices
• 65 percent predicted further rises in the coming year
• 42 percent had frozen recruitment
• 38 percent said they had reduced job numbers in-store
• 38 percent of CFOs suggested they had reduced investment
• 15 percent had already delayed opening new stores
We are all part of the eco-system
Sascha Blodau said…… “People want to see a successful town centre and empty or boarded-up shops simply kill the high street. Retailers whether they are part of the leisure and pleasure sector such as AGCs, or if they are banks, building societies or supermarkets are all part of the same joined-up retail ecosystem……
