Retailers warn of rising prices, job losses amid tax hike fear: BRC

Given concerns about potential tax rises on the horizon, 56 per cent of CFOs described their feelings about trading conditions over the next 12 months as ‘pessimistic’, with only 11 per cent suggesting they were optimistic (33 per cent were neither optimistic nor pessimistic).

When asked about the consequences of the last Budget, which saw huge increases to employer national insurance and national living wage, 85 per cent of CFOs said their businesses had been forced to raise prices, with two-thirds (65 per cent) predicting further rises in the coming year.

Jobs were also at risk: 42 per cent of CFOs said they had frozen recruitment, while 38 per cent 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 per cent of CFOs suggested they had reduced investment, while one in six (15 per cent) had already delayed opening new stores, the BRC said in a press release.

The biggest financial fear – those appearing in almost 9 out of 10 CFOs “top 3 concerns for their business” (88 per cent) – 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 per cent of CFOs had it in their top 3 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.

The government has pledged to reform the broken business rate system, reducing rates for some retail, hospitality and leisure (RHL) outlets, by creating a new higher threshold for large non-domestic properties, including 4,000 retail stores. These large stores account for hundreds of thousands of retail jobs, and play a vital role in attracting footfall to high streets and other shopping destinations, benefitting smaller businesses around them. 

“Retail was squarely in the firing line of the last Budget, with the industry hit by £7 billion (~$9.29 billion) in new costs and taxes. Retailers have done everything they can to shield their customers from higher costs, but given their slim margins and the rising cost of employing staff, price rises were inevitable. The consequences are now being felt by households as many struggle to cope with the rising cost of their weekly shop. It is up to the chancellor to decide whether to fan the flames of inflation, or to support the everyday economy by backing the high street and the local jobs they provide. Retail accounts for 5 per cent of the economy yet currently pays 7.4 per cent of business taxes and a whopping 21 per cent of all business rates. It is vital the upcoming reforms offer a meaningful reduction in retailers’ rates bill, and ensures no store pays more as a result of the changes. If instead, the chancellor chooses to add further costs to retailers and high streets, it will be the British public who suffer from the knock-on impact on inflation,” Helen Dickinson, chief executive at the BRC, said.

ALCHEMPro News Desk (RR)