Business In News
With today marking three weeks since Liz Truss was appointed the UK Prime Minister has revealed that despite consumers reduced spending power in the wake of record inflation and the energy crisis, independent retailers are having to rely on the support of consumers and their local community, rather than the government, to keep them in business.
Whilst the majority of British independent retailers feel optimistic that consumers will continue to support their shop, despite the cost of living crisis, fewer have faith that the new Tory government will positively support independent retailers and high streets.
The research by Ankorstore:, ‘The State of Independent British Retail’, identifies the pressures facing retailers as inflation and the cost of living increases, the ongoing political turmoil plays out and the after-effects of Covid-19 continue to impact consumer spending, and highlights the need for top-down support to secure the future of British independent retailers.
Gen-Z independent retail owners are the most optimistic and hopeful that Liz Truss’ appointment will have a positive impact when it comes to supporting local high streets and independent retailers, with 61% believing the new leader will have a positive impact. This steadily decreases with age: 52% of 35-44s, 25% of 45-54s and just 17% of over 55s believe the same.
The reality, however, is that Brits are tightening their belts, with three in five consumers spending less (both online and in store) due to rising costs and a recession. Millennials, in particular, are feeling the pinch, with over two thirds stating that they will be spending less on luxuries and commodities as the cost-of-living crisis continues. Whilst shoppers may be reducing their outgoings, they are making a concerted effort to support independent retailers and shop local, with 83% believing it is important to support their local high street, despite the cost of living crisis. In fact, ‘supporting their local community’ was Brits top motivation to shop locally, beating convenience, and choosing to shop more sustainably.
Retailers breathe a sigh of relief thanks to the Energy Bill Relief Scheme but it’s not enough
When it comes to energy prices, the government’s Energy Bill Relief Scheme announced last week has potentially saved up to two thirds of independent retailers, who previously worried that they would be at risk of closure without support – and a fifth that stated that soaring energy prices were likely to force them to close for good without the bill.
In fact, the majority of retailers believed that soaring energy prices would have had a long-term impact on their business, citing unprofitability, an inability to make new hires, debt and reduced opening hours as key consequences.
Although the Energy Bill Relief Scheme is a welcome and much sought after support package for British independent retailers, the support doesn’t go far enough with both consumers and retailers calling on the government to do more. The majority of independent retailers are calling on the government to cut business rates in order to preserve British high streets, with that figure rising to 90% for those who only have physical stores. The majority of UK consumers have already noticed an increase in the number of empty shops on their local high streets, and three quarters of consumers agree that the government should provide more support for independent retailers and shops.
In an attempt to navigate the storm, over two thirds of retailers plan to freeze hiring. This paints an alarming picture of an unravelling economy, with inflation expected to hit 20% as a recession looms. Female independent retailers are the most cautious, with a staggering 84% stating that they don’t plan on hiring any new staff in 2023, compared to just 58% of male retailers. The fact is that employment is critical in supporting and leading Britain through this crisis, calling for the UK government to respond accordingly.
Tarun Gidoomal, UK General Manager at Ankorstore, commented: “Our research confirms the harsh reality that the majority of small businesses do not predict that they will survive the extraordinary pressures that they are currently facing. As a business that champions and supports independent retailers all over Europe, we hope this research serves as a wake-up call to the UK Government. Inaction is simply not an option at such a pivotal time for independents.
“Whilst the Energy Bill Relief Scheme is a welcome step in the right direction, much more is still needed. It’s not enough to provide a six-month solution to one part of a multi-faceted situation caused by chronic under investment, rampant inflation, the cost of living crisis and Covid, to name a few – there needs to be longer-term investment in order for small businesses to survive, and business owners to sustain their livelihoods.
“The eye-watering increases in costs across the board are forcing consumers to cut spending and are unsustainable for retailers. We must come together to breathe life back into British high streets which is core to our mission of rewilding retail.”
The Levelling up and Regeneration Bill is clearly under-delivering, and action needs to be taken on business rates
The Government’s Levelling Up and Regeneration Bill came into play earlier this year, promising support for retailers and the revival of British high streets.
It comes as no surprise that UK retailers (85%) are calling for Liz Truss to cut business rates to preserve what is left of the high street. Britain is on the cusp of a new chapter, and retailers are hoping the new prime minister will step up to the plate and bring back greater stability.
Mary Portas, British retail expert and broadcaster, said: “Independent retailers are confident that consumers will continue to support them even as the cost-of-living crisis rages. In fact, a huge 69% of them feel like that. So from the ground up at least, retailers have faith.
“They’ve also proved year after year that they’re resilient, they can pivot, they flex, bend and come out the other side. As one CEO said to me this week: ‘Retailers are positive realists.’
“But what they cannot do is fight the structure from the top down. And right now, they are going into battle yet again with their hands tied. We’ve had years of inaction by the government and this research shows a staggering 85% of retailers are now calling for business rates to be cut.
“But will meaningful action be taken at a legislative level? Let’s hope so. Consumers, retailers and government all have to work together to enable independent retailers to survive in the present – and thrive in the future.”
Independent retailers not convinced Truss’ government will positively impact the high street