Retailers urge Healey to act as consumer confidence slips ahead of Budget
Britain’s retailers have sounded a clear warning to Chancellor John Healey: unless the government eases the “burdensome” costs facing businesses, consumer confidence will keep sliding and households will pull back on discretionary spending. The British Retail Consortium (BRC) — representing major names such as Tesco, Sainsbury’s and Marks & Spencer — has called on the Chancellor to prioritise measures in next month’s Budget that tackle the trio of pressures squeezing the high street: rising business rates, higher employment costs and elevated energy bills.
Consumer mood turns sour
New survey data from the BRC and Opinium shows consumer confidence fell in September for the first time in four months. Almost half of Britons now expect the state of the economy to worsen over the next three months, up from 44% in August, and nearly a third anticipate their personal finances will deteriorate — up from 28% the previous month. The signs of belt‑tightening are visible in planned spending cuts: the proportion of people expecting to spend less on clothes rose from 11% to 13%, and those looking to cut back on electronics climbed to 12%.
“Triple blow” hitting retailers and shoppers
Helen Dickinson, chief executive of the BRC, put it bluntly: consumers want the government to “prioritise bringing down the cost of living” in Healey’s first Budget. Retailers are prepared to play their part in keeping prices stable, she said, but warned the Chancellor mustn’t add to the headwinds they face. The BRC wants immediate action to blunt the “triple blow” of escalating employment costs (including National Insurance and wage pressures), high energy bills and the risk of rising business rates.
Business rates: freeze the multiplier, say retailers
One concrete demand from the BRC is a freeze of the business rates multiplier to prevent another round of burdensome tax increases for shops and warehouses. There is also concern about proposals reportedly under consideration to shift the burden between large retail outlets and smaller high‑street traders — a move that retail bosses warn could have unintended, damaging consequences for the wider retail sector and for local high streets.
Weak growth and waning business confidence
Economic snapshots underline the fragility of the recovery. The S&P Global PMI index, which tracks activity in UK manufacturing and services, slipped from 52.5 in August to 51.7 in September — a three‑month low. S&P’s chief business economist Chris Williamson said the data implies underlying quarterly GDP growth is running at “a mere 0.1%,” signaling sluggish expansion alongside rising inflationary pressures.
Williamson highlighted a worrying mix: subdued business confidence, stuttering growth and ongoing cost pressures that discourage hiring. Manufacturing growth slowed markedly, while service firms flagged domestic weakness and geopolitical uncertainty as constraints on activity. In short, the macro backdrop gives retailers little room for optimism.
Employment, energy and borrowing: a toxic mix
Retailers face a complex cost picture. Employment costs have been pushed up by wage pressures and tax/NI changes; energy prices remain volatile and can hit large stores and distribution centres hard; and borrowing costs eat into investment capacity. Add uncertainty around government policy — particularly in the lead‑up to a high‑stakes autumn Budget — and firms delay hiring and expansion plans.
What the BRC wants from the Budget
The risk to the high street and to households
Retailers warn that any punitive tax moves against larger shops or warehouses will have knock‑on effects through supply chains and on local high streets. If larger retailers are hit with a tax raid, they may pass costs on to consumers or retrench investment and jobs. For households already feeling the squeeze, that could mean higher prices, fewer local services and weaker employment prospects — a vicious circle that would further erode consumer confidence.
Politics and timing
Healey’s first Budget is a testing political moment. With inflationary fears and high public debt in voters’ minds, the Chancellor must balance fiscal responsibility with measures that protect living standards and support the economy’s fragile recovery. The BRC’s message is simple: fiscal tightening that aggravates business costs risks flattening consumer spending and deepening the economic drag at a sensitive moment.
Why it matters
Retail activity is both a barometer and a driver of the wider economy. When shoppers pull back, the effects ripple from store tills to warehouses, logistics firms and manufacturers. Policymakers face trade‑offs, but the BRC’s warnings highlight the political as well as economic stakes: failing to arrest the decline in consumer confidence could prolong stagnation and damage public trust in government economic stewardship.
