The Retailer Summer Edition 2022

I can’t remember a time with as much disruption as the last two-and-a-half years. A pandemic, three lockdowns, an HGV driver shortage, the ‘pingdemic’, a huge investment in digital, and a decline in footfall yet to fully return. A war in Europe, creating untold suffering in Ukraine and creating reverberations through supply chains around the world. And now a cost-of-living crisis – with inflation at a forty-year high and little end in sight. Many retailers tell me that the current environment is worse than the height of Covid. They find themselves squeezed between higher costs from all angles, multiple logistical issues and lower demand from their customers. Atight labour market leaves many businesses struggling to fill essential roles. Wage bills are rising fast. Global commodity prices have increased precipitously (the FAOGlobal Food Price Index is up 22% in the last year alone). Energy costs – uncapped for businesses – are soaring. Shipping and road freight costs remain a massive burden. And Government has introduced National Insurance rises, a Plastic Packaging Tax, and removed almost all Business Rates and other support and reliefs brought in during the pandemic. Despite all this, the focus of industry leaders is on how to support their customers caught in the cost-of-living crunch. Value ranges have expanded, discounts have been introduced for vulnerable customers, and many cost rises are being absorbed by retailers. Looking forward, retailers continue to seek cost-savings across their operations, and many have pledged to invest in lower prices in the future. And perhaps most importantly, many are raising pay to help colleagues and their families cope with the economic onslaught. Unfortunately, things aren’t going to get better any time soon. The Bank of England forecast inflation to continue to rise this year, with an economic slowdown to boot. The UK may be the world’s sixth largest economy, but it still being bludgeoned by external inflationary pressures from around the world. The BRC remains committed to pushing for any mitigations that can help the industry deal with this backdrop. We lobbied for the delayed border check changes and helped push back the scheduled implementation of Extended Producer Responsibility, which would have cost the industry billions of pounds. Such changes of heart from Government are important, but there is more they should consider. Unfortunately, with Government contending with “turbulence” of its own (an understatement, perhaps?), this may prove a tad more difficult than in the past, but that doesn’t mean we shouldn’t continue to try to persuade them. Government can help raise productivity and take steps to mitigate the tight labour market by making the Apprenticeship Levy more flexible so that businesses are in a stronger position to draw down on their huge training funds. Government could findways to make markets work better. The ongoing consultation on transitional relief for the next business rates revaluation in 2023 is a crucial opportunity for Government to address the burden of rates in the short-term, while working on longer-term, meaningful reform. By abolishing downwards phasing of transitional relief, Government would stand by its aims to make the rates system fairer and support those parts of the country which need it most. Government could also look at its legislation pipeline and focus on the important, bigger impact things rather than legislation that becomes the means rather the ends. Sometimes it is just better for Government to get out of the way. So, lots to play for. And while I can’t remember a time with as much disruption as the last two and-a-half years, I also can’t remember a time with so much resilience, innovation, determination and courage as I have seen from the industry and the millions of individuals who keep it together. WE CAN’T SOLVE THE COST-OF LIVING CRISIS, BUT WE CAN HELP MAKE IT BEARABLE

Helen Dickinson OBE Chief Executive British Retail Consortium

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Looking forward, retailers continue to seek cost-savings across their oper ations, and many have pledged to invest in lower prices in the future.”