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Autumn Budget 2024 — retailers prepare for change

AuthorsDomonique West

3 min read

Retail, Corporate, Real Estate, Employment

MS supermarket shelves

The Autumn Budget has retailers — still struggling to adjust after the volatility of Brexit, the pandemic and the cost-of-living crisis — revisiting their financial planning. 

With over £2.3bn in increases to employer National Insurance contributions, an additional £367m from a rise in the National Living Wage and a further £140m in business rate hikes, retailers are carefully considering the new taxation landscape. 

Now, a group of major UK retailers — including Amazon, Tesco, Aldi, Asda and M&S — have written to the Chancellor about the threats of job losses and rising costs, with the Treasury responding that “difficult choices” are having to be made “to fix the foundations of the country”.

Here, Domonique West explains how retailers are reacting and what the Budget means for footfall, investment and more.

 

Impact on retail sector

With the true impact of the Autumn Budget set to hit in April 2025, some commentators point to the disparity between business rates and the retail sector’s contribution to the economy. While retail accounts for just 5% of the UK economy, it’s responsible for 21% of the total business rates paid. 

Some businesses — such as Sainsbury’s and M&S — have warned that higher taxation costs may need to be passed on to customers through higher prices. Of course, change may represent an opportunity for discount operators like Aldi, which saw market share grow significantly during recent years. 

Sainsbury’s saw a profit boost as shoppers returned post-pandemic to the more traditional habit of doing their big weekly shop. Price increases could see some consumers revert back to smaller, more frequent purchases — affecting competition in the market.

 

What the reduction in business rates means for retailers

Many retailers have long campaigned for reduced business rates and at last their voices have been heard. The Chancellor has pledged to permanently reduce rates for high street retail, hospitality and leisure properties with a rateable value (RV) of less than £500,000.

While this provides encouragement to retailers, the benefits won’t be felt until April 2026 or 2027. 

This reduction in business rates also comes with a caveat — a higher rate will be applied to properties with an RV over £500,000.

 

No relief for larger retailers

Retail, Hospitality and Leisure Business Rates Relief was an initiative introduced during the COVID-19 pandemic to support small businesses. Although the relief has been significantly reduced (from 75% to 40%), it has been extended to assist these businesses throughout 2025 and 2026. 

Nevertheless, Rachel Reeves’ critics argue that this won’t provide enough support for larger brands, which are crucial in drawing consumers and driving investment into our high streets and town centres. A diverse mix of thriving stores and an engaging shopping experience are vital ingredients for success if physical retail is to compete with the digital space.

 

Talk to us

Retailers of all sizes need to plan carefully and act strategically to navigate the financial changes arising from the Autumn Budget.

Talk to our multidisciplinary retail experts today by giving us a call on 0333 004 4488, emailing us at hello@brabners.com or completing our contact form below.

Domonique West

Domonique is a Trainee Solicitor.

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