Budget Tough for Local Shops, Some Mitigation for
Independents
ACS (the Association of Convenience Stores) has warned that local
shops will face significant new pressures as a result of today's
Budget. The impact will be felt unevenly across the UK's 50,000
convenience stores, with some measures such as business rate
relief and the increased employment allowance mitigating costs
for smaller independent stores, while providing no help for
chains and larger independent businesses.
The key measures for local shops announced by the Chancellor, and
the costs for local shops associated with them, are:
National Living Wage to increase to £12.21 per hour
National Minimum Wage (18-20 rate) to increase to £10 per hour
Cost to the convenience sector next year: £7.739bn
(increase of £513m)
Employers' National Insurance Contributions to rise to 15%
Threshold for Employers' National Insurance contributions to fall
to £5,000 per year
Employment Allowance to rise to £10,500 a year
Cost to the convenience sector next year: £397m
(increase of £85m)
Retail and hospitality rate relief reduced from 75% to 40%
Small business multiplier frozen for 2025/26
Cost to the convenience sector: £267m (increase of
£68m)
Total cost of main announcements (year-on-year
difference): £666m
ACS Chief Executive James Lowman said: “The cold hard facts are
that the measures announced in the past 24 hours have added
two-thirds of a billion pounds to the direct cost base of the
UK's local shops. At a time when trade is tough and operating
costs are stubbornly high, this will be challenging for our
members to absorb and there will be some casualties on high
streets and in villages and estates across the country.
“Not all shops will be impacted the same. The smallest retailers,
with low NICs bills and lower rateable values for their shops,
will benefit from the welcome increase in the employment
allowance and the retention of 40% of the retail, hospitality and
leisure business rates relief. Retailers with a larger store, a
number of sites or those operating a chain will receive limited
benefit from these mitigations, and this will impact their
ability to invest and to continue to offer services in the
communities they serve.
The following additional measures were announced by the
Chancellor in the Budget speech today:
- Flat rate levy on vaping liquids from October 2026 of £2.20
per 10ml
- Fuel duty frozen and the 5p cut extended for another year
- A new commitment to tackling shop theft and funding directed
to tackling organised gangs
Mr Lowman continued: “The Chancellor's commitment to tackling
shop theft will be warmly welcomed by our members, but they are
interested only in action and in crime against their stores and
their colleagues being tackled effectively. We stand ready to
help implement a new, and better-funded strategy to stop shop
theft, abuse and violence against our members.”
