British Independent Retailers Association

Challenges and opportunities

Andrew Goodacre, CEO of Bira (British Independent Retailers Association), discusses the costs of being in business and highlights key issues that he believes need to be addressed

Bira first raised the issue of business rates in October 2021 and has been pushing the government to take action since. We have been listened to, and have put forward various proposals, and we’re hopeful that something positive will be done - especially with the new Prime Minister Liz Truss in post.

In a statement to parliament within the first week of taking office, she promised an energy support package for six months which would provide ‘equivalent support’ to businesses for gas and electricity bills, which we finally got clarification on a few weeks later and which has been welcomed by all.

This time last year, we were all running our businesses with a degree of freedom, having left all the Covid restrictions behind us. While retail was still a challenge, we could look ahead with more optimism, believing the worst was behind us.

Three top tips

1. If you have not introduced energy saving measures, do so now. At the very least, move to LED lightbulbs.

2. There has been too much apathy on contract renewals. All too often small businesses don’t look at the contract renewal for energy or other business costs such as insurance and card processing.

So opportunities to obtain better deals are missed. This is where

Bira and our service providers can help, as we do the hard work for you - you simply need to tell us what you want to know.

3. Stock management is crucial.

One year on, and retailers are now facing their biggest challenge, which is even more daunting than the Covid period. The current economic crisis is a toxic mix of high inflation, rising costs, higher wages, diminished consumer confidence and, ultimately, reduced spending on the high street.

We are already starting to see the impact with reduced footfall and lower retail sales. I’m pleased to say the clothing sector (especially wedding attire and holiday outfits) has done better than most, but in general we’re seeing consumers start to be more selective with how and where they spend their money.

The differences for retailers between this economic crisis and Covid are the lack of demand (Covid may have closed your shop, but there was demand when you opened) and government support. During Covid the government was quick to respond - something we all appreciated. This time around, there’s no mention of finding ways of helping high street retailers through this.

Guidance since the announcement by the government has been frustratingly slow. For the past 18 months we have been warning ministers and government departments about supply chain inflation being much higher than consumer inflation.

Since last October we have been warning them about the impact of rising energy costs, as our members were telling us then that their energy bills were increasing by 300%. I’m afraid that both the government and the Bank of England have been too slow to respond, and now they run the risk of doing too little too late.

Last October, prior to the budget, we asked the Chancellor to not increase business rates, due to the rising energy costs faced by independent retailers. We were ignored at the time, and now we are pushing for the type of action taken during Covid by reversing the increase in rates announced last April. We shall continue pushing the Prime Minister about the problems faced by retailers, and the actions that could help high streets.

However the guidance we have now received on energy bills, which has promised that businesses will have a discount on wholesale gas and electricity prices, is welcome. This is to be applied to fixed contracts agreed on, or after, April 1 2022. It will also apply to energy usage from October 1 until March 31 2023 and will run for a period of six months. Savings will first be seen in October bills and will be automatically applied to bills.

We are still pushing for 100% relief on business rates for the current tax year, and fiscal stimulation to create demand by reducing VAT. And in the longer term, a complete overhaul of the tax system (including business rates) so that tax is truly proportionate to the affordability of the business.

As well as government support, retailers have to learn from this crisis. All contracts for business services need reviewing, from energy to insurance. Yes, time is short. But if you contact Bira we can do the hard work for you, as we already work with trusted service providers.

When I write about high streets and independent retailers, I try to be positive as there is much to be proud of. There are still the ongoing opportunities of local shopping, social media engagement and sustainability. Retailers are known for their resilience, creativity and determination. They will need all these characteristics and more to survive this latest challenge.

“Retailers are known for their resilience, creativity and determination”