IN-DEPTH


Retail leaders, including Next and the owner


What the Autumn Budget means for retail L


ast month, the Chancellor Rachel Reeves delivered her second Budget, confirming that she will introduce


permanently lower business rates for the retail, hospitality and leisure sectors, plus a package of measures aimed at relieving pressure on high streets and rebalancing competition with online rivals. It was a welcome announcement for many


across the retail industry as Ms Reeves explained the permanently lower tax rates for more than 750,000 retail, leisure and hospitality properties – what she described as “the lowest rates since 1991”. The reductions will be funded through higher rates on properties worth more than £500,000, which she said includes the large warehouses used by online giants. The measures come after concerns from


businesses have intensified since March. Following tax rises in April, the sector’s capacity to absorb additional operating costs is said to have “narrowed sharply”. Helen Dickinson, CEO of the British Retail


Consortium, commented: “Retailers face a delicate balancing act as they strive to invest, hire, and keep prices affordable. The announced permanent reduction in retail business rates is an important step to reduce the industry’s burden from this broken tax.


8 • FOOTWEAR TODAY • DECEMBER 2025 “Yet the decision to include larger retail


premises in the new surtax does little to support retail investment and job creation,” she added. Michael Shapiro, Commercial Property


Partner at law firm Spencer West LLP, added: “Despite lowering business rates for many retail and hospitality businesses through higher rates on warehouses used by online retail companies, the fact remains that the local high street has many empty retail and hospitality premises. “While an overhaul is scheduled for April


2026, this is something that needs to be addressed with urgency. Retail businesses continue to struggle through the current system, which is further compounded by the rise in National Insurance in the last Budget and the incoming rise to the minimum wage in January. “The domino effect of this on retail


and hospitality workers alike cannot be underestimated, and the impact is clear to see by walking along any high street.” Additionally, as part of her plans to “support


a level playing field in retail”, Ms Reeves also said she will ensure customs duty applies to parcels of any value, stopping online firms from undercutting high street businesses. Although no timeframe for this change has been mentioned as yet, so it remains to be seen whether, or when, this will come into effect.


of Primark, have said that reform “cannot come soon enough”, warning that volumes of non-compliant goods entering the UK are accelerating and causing issues in the market. Ms Dickinson added: “While we welcome the decision by the Chancellor to close the de minimis loophole, the proposed timeframe is simply too long. There are 1.6 million parcels arriving in the UK every day, double what they were last year, and businesses cannot afford any delay on scrapping the existing rules. “The US has already removed its threshold, with the EU following suit next year; the Chancellor must take decisive action and remove the exemption as fast as possible. This will help protect British consumers from the risks of imported goods that don’t meet the UK’s stringent environmental and ethical standards, while promoting fairer competition.” Elsewhere in the Budget, we learned that from


next April the National Living Wage for workers aged over 21 will rise 4.1 per cent to £12.71 an hour, boosting annual full-time earnings by £900. Plus, the wage rate for 18-20-year-olds will rise 8.5 per cent to £10.85, and the rate for 16-17-year-olds and apprentices will rise six per cent to £8 an hour. The increases will benefit a total of 2.7 million


young and older workers, the Government previously said, but as Jane Gratton, Deputy Director of Public Policy at the British Chambers of Commerce, explained, every above-inflation wage increase leads to higher business costs, lower investment and “fewer opportunities for individuals”. In her Autumn Budget announcement, the Chancellor said she “built our economic resilience for the future”, and that her plans will “cut debt and cut the cost of living”. However, sharing his reflections, Chris Brook-


Carter, CEO of Retail Trust, said: “It remains to be seen whether the Budget will do enough to reassure the UK retail industry during the busiest shopping period of the year. The industry needs more support from the Government to help bring respect back to the high street.”


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