Retail news round-up on November 4, 2015: Burberry’s £50m investment for new trench coat factory, shop prices down and business rates bill.

Small shops could see business rates bill rise if relief ends

Retail campaigners have warned that more than 275,000 small high street shops could see their business rates bill increase 20% from an average of £7,567 to £9,140 next year if the retail tax relief worth £417m ends.

Business rates expert Paul Turner-Mitchell and others fear that tax breaks could be stopped from next year as the Government looks to overhaul business rates

“Property taxes are currently the highest of any G7 country. A 20% rise could do untold damage and lead to more empty shops. A lot of retailers are on a knife edge and business rates are the final nail in the coffin,” said Turner-Mitchell.

Tesco proposes new terms in deal for dairy farmers

Tesco is looking to sign a new deal with dairy farmers following milk price protests this summer that trigged a ‘state of emergency’.

The grocer has proposed to farmers in its letter that it would review the price it pays every three months rather than every six and rank suppliers based on their performance, with the worst potentially losing their deals.

The move is expected to be widely welcomed by farmers as Tesco stands by its commitment to pay a price for milk based on the cost of production.

Burberry to set up new trench coat factory in Leeds

Luxury fashion label Burberry has committed to inject an initial investment of at least £50m in a new trench coat manufacturing factory in Leeds.

The facility, dubbed Project Artisan, will enable the brand to draw together production of the coats and the gaberdine cloth they are made from – currently produced at two separate sites in Castleford and Keighley.

The move would see all 800 current staff transferred to the new site by 2018, handing Burberry the capacity to potentially triple its current UK production of 5,000 coats a week.

Work is to begin next year on the new site.

Chancellor George Osborne welcomed the new investment in Leeds, describing it as “a massive vote of confidence in our plans to build a ‘northern powerhouse’”.

Shop prices deflation continue in October

Shop prices in the UK dropped for the 30th straight month in October, dragged down by low commodity prices and fierce competition among retailers ahead of the crucial Christmas period.

Prices plunged 1.8% year on year last month, following the 1.9% fall in September, according to the figures for the British Retail Consortium (BRC) and Nielsen.

Food prices decreased 0.4% year on year, spurred by a 1% decline in fresh food prices.

Non-food prices tumbled an annual 2.7%. Clothing, books and DIY items experienced the deepest levels of deflation.

The BRC said it expected shop prices to continue falling in the run-up to the Christmas trading period as retailers try to attract shoppers.