Retailers’ operating costs have increased by 21% since 2006, and it is centrally-driven costs that have risen most rapidly.
According to a new study produced by Oxford Economics for the British Retail Consortium, the annual cost to retailers of doing business is now £116bn – up from £96bn in 2006. At the same time, retailers’ sales values increased by just 12%, a differential which the BRC says is forcing store closures and stifling job creation.
The research also shows that, while many private sector, market-sensitive costs such as rents have responded to economic realities, centrally-driven costs such as business rates and utility bills have gone up sharply.
The BRC is using the information to urge Chancellor George Osborne, ahead of next month’s Budget, to help consumers and cut business costs. Back on the agenda is a call to freeze business rates in April and then deliver a system for the future that produces increases that are more affordable and predictable. Using an annual average of CPI, rather than a single month’s RPI, would achieve this, it says.
The Chancellor ignored widespread pleas to freeze business rates when he delivered his Autumn Statement last year.
The BRC is also calling for help for the UK’s struggling high streets through central coordination on implementing the Portas Review recommendations, and the implementation of parking performance league tables.