On the back of the government’s latest economic update, I’ve read some people saying that retail has gotten used to being ignored by set pieces from chancellors, past and present.
However, as I speak with executives across the industry, few have been critical of Rishi Sunak’s most recent economic package.
The chancellor’s economic update may have saved its juiciest bits for hospitality – an industry hit harder than our own – but retailers cannot deny they have benefited from government support in the months gone by and continue to do so.
“This industry constantly adapts and reinvents itself through a stream of micro-innovations”
During the last four months, the BRC has helped secure the 12-month business rates holiday, providing a vital lifeline for thousands of shops; the ability of online retail to continue to trade during lockdown; the creation and extension of the coronavirus large business interruption loan scheme; relaxation of competition law; deferral of VAT payments – and much more.
Sunak has also supported jobs with the coronavirus job retention scheme and his latest announcement provides extra support with the job retention bonus scheme. This will help some, though I appreciate not all, businesses retain thousands of workers previously furloughed.
Other announcements included funding for apprenticeships and hiring young people, many who have recently left education only to find a barren job market.
Furthermore, while the industry has suffered in recent months, with physical non-food shops losing £1.6bn per week during April and May, there are definite signs of improvement. Retail sales grew 3.4% year on year in June, the highest in two years, thanks to the release of pent up demand. Unsurprisingly, this growth was driven by online sales, currently accounting for one in every two pounds spent in the UK on non-food items.
Focused on the future
From where I am sitting, boardrooms across the industry are focused on the future, not feeling left out by the chancellor.
Retailers are evolving in response to changing consumer demands – continuing to expand and improve their digital offers while also maintaining a safe and personalised in-store experience in a socially distanced world if they have physical space.
Coronavirus is accelerating many of the changes we have seen over the last decade and adapting to these requires innovation and investment. Thankfully, this industry constantly adapts and reinvents itself through a stream of micro-innovations.
“Retail may be facing the biggest threat in a generation but we are not facing it alone”
But long-term change will be required for our industry to thrive. A business rates holiday is great for now, but comprehensive reform is essential, as is avoiding the cliff edge of the holiday ending next April. Online taxes are not the answer.
The much-needed rebasing of rents remains essential and the cost of crime – both human and economic – continues to rise.
The next six months threaten massive new costs unless the government can agree on a comprehensive and constructive free trade agreement with the EU. The rigid apprenticeship levy continues to limit the training needs of the whole industry. The availability of digital skills remains woeful.
We’ve added a host of new members to our ranks throughout the crisis and by focusing on these longer-term issues, we will retain their trust and patronage.
Retail may be facing the biggest threat in a generation but we are not facing it alone.
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