Retail sector calls on government to do more on inflation after spring statement

While the chancellor Rachel Reeves used today’s spring statement to try and paint a rosier picture of economic recovery in the UK, many retailers and industry bodies have suggested the government’s pro-growth message feels at odds with reality.

Speaking at LIVE: Retail Week x The Grocer 2026, Asda executive chair Allan Leighton said that the current Labour government, and previous Conservative governments, have become “less business friendly” over the last decade or so.

“In the early 2000s, governments went out of their way to try and engage business. In more recent years though, there are many issues and constraints that are being put on businesses by government that weren’t there before,” he said. 

“You can’t really complain about that, you just have to deal with it,” he added. “I still believe that business can have a bigger impact on society and the economy than the government can anyway, and I maintain that.” 

The leader of one fashion business said that many retailers are still “managing the fallout” from a difficult Christmas trading period and added that this year would only bring more “uncertainty”.

“A lot of the costs from the last Budget have yet to even feed through,” they stated, expressing the belief that many businesses were likely to be put under strain with more costs being heaped onto their balance sheets from the beginning of April.

BRC chief executive Helen Dickinson said: “Today’s figures underline the scale of the economic challenge; growth is fragile, unemployment has climbed to 5.2% and is expected to rise and businesses are cutting back. While household finances may improve later in the parliament, the immediate risk is to jobs, especially in retail.

“At a time when job vacancies are falling and confidence is weak, the priority should be protecting employment and strengthening living standards. Instead, retailers face a cost of doing business crisis. Employment costs rose by more than £5bn last year, and poorly implemented reforms in the Employment Rights Act risk adding further cost and complexity at the worst possible moment. Reforms must raise standards without deterring hiring.

“The chancellor spoke about boosting investment in communities. Our high streets are the backbone of local economies, yet business rates continue to undermine their viability. While government has taken some steps to fix the current system, it is broken and must be overhauled entirely to reduce the burden on the high street once and for all.

“Retail has unparalleled reach across the country, and stands ready to work with the government to ‘spread’ and ‘unlock’ opportunity in every part of Britain. But to do so, government must get a grip on the cost of doing business so retailers can invest confidently in people, places and prices.”

Federation of Small Businesses policy chair Tina McKenzie pointed out there is less than a month until some business costs – including employment costs and business rates – go up.

“The chancellor missed the chance today to address the costs stack about to hit small firms,” McKenzie said.