British Retail Consortium has urged Government to improve UK competitiveness to ensure retailers invest rather than increase their cash reserves.
BRC has written to the Chancellor ahead of next month’s Budget, warning that he must “create conditions that encourage retailers to turn cash into growth- producing investment”.
New research undertaken by BRC and Oxford Economics shows that while retailers’ cash holdings rose from £283m to £424m between 2006 and 2011, their investment as a proportion of turnover fell by 27% because retailers are “too fearful to invest”.
The Chancellor “must improve UK competitiveness so it is more attractive for retailers to make that investment in the UK than abroad”, the report found.
BRC director general Stephen Robertson said: “These figures suggest the Chancellor has much more to do to inspire confidence in business. Retail could drive growth and job creation across the UK if the trading conditions were right.
“But, over the last five years, retailers have been accumulating cash they are often too fearful to invest. The decisions the Chancellor takes will have a big impact on when and where those businesses expand.
“Like other sectors, retail investment is globally mobile. Overseas markets have become increasingly attractive. To secure serious growth the Chancellor needs genuinely to deliver on making the UK more competitive than its rivals for that investment.”
In its Budget Submission 2012: Towards Competitiveness the BRC has set out its priorities for “a more competitive UK where businesses are confident to invest”.
It covers business rates, overregulation and boosting town centres.
Robertson added: “The Government says it’s backing business as the route to growth. But it has yet to deliver material change to the costs and difficulties of doing business. It must go further faster if the UK is to attract retail investment, create jobs and reinvigorate high streets.
“The Chancellor must be bold in his quest for growth. Addressing our concerns is vital to securing the potential of the UK’s biggest private sector employer. Quite simply, he must get on with it.”