Autumn Budget 2025: Retail Sector Predictions & Wish List

Confidence in the retail sector has been under some pressure in the recent months, reducing consumer confidence, inflation that has remained stubbornly high and pressures from rising operational costs.  The Chancellor’s recently outlined a vision for faster growth fuelled by increased investment. Retailers have been given support in the form of The Retail, Hospitality and Leisure (RHL) business rates relief scheme for the 2025/26 financial year for eligible properties and initiatives such as The “Pride in Place” programme to fund regeneration to communities that require the most support. However, retail investment is being burdened by higher employer NICs, an increased National Living Wage, resulting in reduced cash flow and margins, and a significant increase in retail crime. These additional expenses are hindering new investments in stores and jobs, and pushing retailers to raise prices in an already

The burden of business rates is an issue that frequently comes up frequently and is something that’s already featured on the ‘Wishlist’ of the British Independent Retailers Association as priority area for the Chancellor to address. While some support measures were announced at the Autumn Budget in November 2024 – including an extension to the Retail, Hospitality and Leisure Relief (RHL) for 2025/26– many larger companies expect to see a rise in their rates bill when this starts from April 2026.

Wider reform of business rates, which some in the sector believe are an advantage to online retailers at the expense of those with physical property portfolios is also probably not going to feature. The government is looking at the system, but any proposals will need to be given careful consideration, and review is likely to take time. Larger retailers are asking the government to consider transitional reliefs to protect retailers from sudden rates increases due to property revaluations and for Small Business Rate Relief to be indexed to ensure smaller retailers are not pushed into higher rate bands, with larger retailers requesting assurances that they will be protected from the “Surtax” of higher business rates and other tax increases, unfairly burdening large retailers as a result of their increased number of employees, property sizes and exposure to packaging taxes.

Retailers and other labour-intensive industries have raised their concerns with regards the increases in employers NIC and minimum wage rates from April 2025, a reduction or other support that gives some stability and certainty that there will not be any further increases in either of these areas would be welcomed by retailers. New taxes or increases to existing taxes are argued will be passed on to customers through higher prices and risks adding to the burden of high levels of inflation.

Some retailers and other industries such as hospitality and leisure have been requesting the return of VAT free shopping for retailers, as since its abolition in 2020, as this has cost the economy an estimated £10.7m in lost GDP annually. Reinstatement would give a much-needed boost to retailers, however with the cost to the treasury estimated at £2bn per year in tax revenue, this may be unlikely to be reintroduced at the current time.

Retail is an industry that is extremely susceptible to crime, this has not been helped by cost-of-living pressures making instance of retail crime more prevalent, the knock-on impact is a further reduction in retailer margins and staff morale. Major retailers want to see more support from the government in supporting by addressing rising violence and abuse against staff and organized retail crime.