Devolved British governments must not hamper retail giving something back, says Andy Clarke.

Devolved British governments must not hamper retail giving something back, says Andy Clarke.

With stores across the country and millions of touch points with customers each week, retailers have a strong overview of the state of the nation and it’s clear the British consumer faces unprecedented challenges.

According to our latest monthly Income Tracker, the average British family has £15 less per week to spend than at this time last year – the biggest drop since we began tracking disposable income in 2007.

This is part of an accelerating trend as a combination of inflation, fuel and utility bills cut into household finances. With winter due to set in, this is only likely to get worse, forcing people to tighten their belts more each day.

There is inevitably a knock-on effect on spending and the change in consumer behaviour is forcing retailers to change. We have to respond to the reality of customers’ lives – shoppers are budgeting hard and cutting back. Food is their priority, with other stuff falling by the wayside.

This sets shopkeepers like me a challenge that I relish. Offer consumers genuine value and they still have money to spend. That’s why we keep prices across the store and petrol forecourt as low as possible. We know that every fiver in the tank is a fiver people can’t spend on their kids.

At Asda, we’ve supported the measures that the Government has taken to put the country’s finances back on track.

If our customers are going to drive recovery from the high street, they are going to need more, not less, cash in hand over the next year or so. In order to help, retailers need to keep investing in price.

That challenge is made all the more difficult when politicians make wrong decisions. Currently the Northern Ireland executive and Scottish government are planning to introduce a new tax on large retailers that would raise almost £50m a year.

In my view, it’s the wrong target, wrong time and wrong tax. This is the time to pull together and encourage businesses to invest in devolved nations and create jobs, not to send a signal that investment is unwelcome. The cost of doing business is already higher in these markets, and adding to the burden of families that have some of the lowest levels of discretionary income in the UK would be a mistake.

Retail is not the sector to target. Asda is doing more than most to put money back into consumers’ pockets, though the same can’t be said for all sectors. The rise in utility bills has been well-documented. While we recognise that costs are rising there is more to be done to shield hard-pressed consumers from inflationary pressures.

When I explain to politicians that we only make 5p in the pound they are astonished. A recent Ofgem report said that utility companies make twice that.

It’s little wonder that our own research shows a freeze on energy bills topping the list of measures customers would like to see the Government take to ease the pressure on family budgets.

Families are struggling, and asking for help. The devolved governments should turn their attention to other sectors that have damaged the economy when attempting to raise cash.

They should remove retailers from the shackles of an inappropriate tax that will only lead to increased prices for the average family. When retailers are working hard to keep the cost of living down, we need the devolved governments to clear the path to growth, not put up barriers.

  • Andy Clarke is president and chief executive of Asda