As Chancellor Rachel Reeves prepares to present the Labour government’s inaugural Budget, the grocery sector is closely watching for policies that could significantly impact their operations.
In anticipation of the upcoming Budget, leaders in the grocery industry have expressed a desire for substantial reforms, particularly in the area of business rates. According to Stuart Machin, CEO of a major retail chain, the promise of overhauling business rates and providing flexibility in apprenticeship levy funds must be upheld. He notes the disparity in the retail sector, which makes up 5% of the economy yet accounts for a disproportionate share of business taxes and rates.
Shirine Khoury-Haq, CEO of a leading cooperative, echoes these concerns, citing a £20 million increase in their business rates over the past two years. She calls for equitable tax contributions from online businesses and stresses the need to revitalise physical retail spaces. The current system, she argues, unfairly burdens the industry, with retail contributing 20% of all business rates despite its economic size.
James Lowman, head of the Association of Convenience Stores, highlights the financial pressures on local shop owners. These businesses face potential new costs and regulations, leading to difficult choices such as reducing investment or services. He urges the Chancellor to consider the critical role local shops play in community life across the UK.
On employment rights, there is cautious optimism about upcoming changes. The John Lewis Partnership’s CEO, Nish Kankiwala, supports the government’s growth agenda, while Khoury-Haq appreciates the move to formalise certain worker rights. Both express willingness to engage constructively as these policies develop.
In the farming sector, there is a call for action to address supply chain imbalances. Guy Singh-Watson, a campaign leader and organic farm owner, criticises the misleading branding practices of supermarkets and advocates for stronger enforcement through the Groceries Code Adjudicator. He also suggests innovative ideas like allowing farmers to sell directly in supermarket car parks to strengthen local produce visibility.
Tom Bradshaw of the National Farmers Union criticises the underutilisation of the agricultural budget, urging the government to fully support the farming industry. There is a need to ensure funds are directed towards their intended use, benefiting those within the sector.
Concerns about National Insurance and its effect on employment are raised by Stuart Machin, who warns that increased taxes could hinder job opportunities. Simon Roberts of Sainsbury’s calls for lower interest rates to aid household spending, emphasising the need for clarity in financial policies.
The wine industry also seeks relief, with Nicola Bates from WineGB advocating for duty cuts to spur economic growth and investment in small producers. Mark Kent from the Scotch Whisky Association calls for reduced taxes to reverse recent financial setbacks in the industry.
Health concerns related to obesity prompt discussions on potential reforms. Lauren Woodley from a major food company recognizes the worsening crisis and suggests taxation on unhealthy foods as a possible, though not sole, solution. Retailers like Tesco highlight the necessity of uniform industry regulations to drive change effectively.
The grocery sector’s anticipation of the Budget reflects broader economic and operational challenges. As the industry awaits the Chancellor’s proposals, there is a clear call for fair tax practices, support for local businesses, and a balanced approach to employment and health reforms. The outcomes of these discussions will be crucial for shaping the future of UK retail and agriculture.
