The open letter from the British Retail Consortium (BRC) outlines what the trade body predicts will be the economic consequences of the Autumn Budget for the UK retail sector.
Bosses at retailers including Tesco, Amazon, Greggs, Next, B&Q, Boots and Burberry have all signed the letter, which explains the “significant concerns” the group has about the impact of the Budget on the retail industry and the economic consequences for inflation, employment and investment.
The 79 signatories of the letter warn that the effects of measures such as higher employer National Insurance contributions (NICs) and National Living Wage increases next year would be passed on to shoppers.
The letter said the measures in the Budget will “create a cumulative burden that will make job losses inevitable, and higher prices a certainty”.
The group calculated a “cumulative cost burden” of more than £7bn, comprising employers’ NIC changes, increases to the National Living Wage and the packaging levy.
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The letter said: “The impact of the Budget NIC threshold change is particularly acute given retail employs large numbers of people in entry-level and part-time roles. Costs from the Budget sit alongside other incoming regulations, including implementation of new packaging levies.
“Taken together, the retail industry’s costs could rise by up to £7bn a year. This will also affect our suppliers, increasing costs that retailers pay for goods and services.”
Under a sub-section entitled ‘Economic Consequences’, the letter said: “For any retailer, large or small, it will not be possible to absorb such significant cost increases over such a short timescale. The effect will be to increase inflation, slow pay growth, cause shop closures, and reduce jobs, especially at the entry level. This will impact high streets and customers right across the country. We are already starting to take difficult decisions in our businesses and this will be true across the whole industry and our supply chain.”
The letter ended with a suggestion the retail bosses meet with Reeves to discuss National Insurance, the packaging levy and business rates.
