The British Retail Consortium (BRC) called for the UK to reform the business rates system to support retailers with their financial burden and to avoid store closures and job losses.
“There are 530,000 people who work in retail still on furlough,” said BRC chief executive Helen Dickinson. “This and the end of the full business rates relief in England in June jeopardises the future of many stores and the livelihoods of those who depend on them.”
“The Government must deliver on its promise to reform the broken rates system in their ongoing review and reduce the financial burden on retailers, or risk more unnecessary store closures and job losses,” she warned.
In the four weeks to 1 May, UK retail sales grew 7.3% compared to two years ago, when trading wasn’t hit by the pandemic. It’s above the three-month average growth of 6%.
However, Dickinson called this growth “fragile” because there is little competition for share of spending while parts of hospitality, leisure, and tourism remain restricted and inner cities and town centres continue to perform poorly as many people continue to work from home.
With the short-term pent-up demand for the shopping experience drawing consumers back to stores, non-food sales across stores and online increased by a quarter between March and April.
Many fashion retailers saw an uptick in sales, particularly in outerwear and knitwear, as people could only meet outdoors. Furniture also saw a boost as consumers can now try before they buy.
“While the boost in sales is positive as the industry continues to invest in safety and the online offer, high streets still have a long way to go on the path to recovery,” Dickinson said.
Analysts at Shore Capital said that easing unemployment concerns are very important to retail prospects, noting that with liberalisation of controls further recruitment is likely to take hold in forthcoming weeks.
“With a strong housing market too, we expect consumer confidence in the UK to further improve, which should underpin household expenditure, noting the material build up of the savings ratio and large cash balances that many, not all, households are sitting on,” the broker said.
“The listed re-opening stores and supermarkets are set to see improving trading momentum and with remedial measures in place, scope for strong free cash flow generation and better earnings momentum. Better times could be ahead.”
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