The 2024 Budget, introduced by Chancellor Rachel Reeves, brings notable economic shifts impacting various sectors, including grocery.
- A reduction in business rates is planned, but the changes leave key questions unanswered for high street retailers.
- Enhanced measures against retail crime are introduced, with a focus on ending immunity for low-value shoplifting.
- A rise in National Insurance Contributions presents challenges, impacting investment in both retail jobs and infrastructure.
- Adjustments to alcohol duties, particularly affecting wine and spirits, have been met with industry disappointment.
The unveiling of the 2024 Budget has brought significant changes to the business landscape. While the Chancellor’s plan to lower business rates for retail and hospitality signals a move towards reform, it raises questions about its actual impact on the larger stores and distribution hubs, which may still bear a considerable burden. As Shirine Khoury-Haq of Co-op suggests, there is hope for a fairer system enabling high street investment. However, Helen Dickinson from the British Retail Consortium emphasises the need for solutions beyond burden redistribution, highlighting the disproportionate effect on the retail industry.
In an assertive stance on retail crime, the government plans to abolish the low-value shoplifting immunity, allocating more funds to combat organised theft and improve policing. This initiative has been positively received within the industry, with leaders like Khoury-Haq from Co-op and Helen Dickinson advocating for these enhancements. They underline the devastating impact retail theft has on the sector, incurring costs upwards of £1.8 billion. Additionally, James Lowman from the Association of Convenience Stores expresses support, anticipating effective action against crime.
The budget proposes an increase in National Insurance Contributions, causing concern across the grocery sector. With contributions set to rise, the added financial strain could hinder both job and infrastructure investment. Helen Dickinson remarks on the heavy tax burden this places on an industry that operates with low margins, potentially affecting the livelihoods of the 5.7 million people employed across retail and supply chains.
Amidst these policy shifts, the National Living Wage will see a rise, reflecting the government’s commitment to workers’ welfare. Co-op’s stance aligns with this as they continue to support fair wages. However, Khoury-Haq urges further changes to remove age-based pay discrepancies.
Furthermore, the budget introduces changes in agricultural and alcohol duties, stirring controversy among industry leaders. The reduction of inheritance tax relief for farms potentially threatens their sustainability, as noted by NFU President Tom Bradshaw, raising concerns over rising production costs and impact on agriculture. In parallel, the hike in alcohol duties has prompted backlash from leaders in the wine and spirits sector, who argue it could stifle growth and fail to meet revenue goals. Miles Beale from the Wine and Spirit Trade Association highlights the potential negative consequences for both businesses and consumers.
These budgetary changes signal a challenging period ahead for the grocery sector, necessitating careful navigation to balance fiscal demands with operational sustainability.
